Feature: Raising the bar on IP

Get your patent applications in now, folks. Or, at least, get them in well before 15 April 2013, when the Raising the Bar bill kicks in.

That’s the advice from Michael Caine, patent attorney for Davies Collison Cave and fellow and council member of the Institute of Patent and Trade Mark Attorneys of Australia (IPTA). For on 15 April next year, the bar for awarding a patent in Australia will rise, with implications that affect Australian life science companies and researchers alike.

According to Caine, The Intellectual Property Laws Amendment (Raising The Bar) Bill 2011 is the most significant reform to Australia’s IP law since the Patents Act of 1952, dwarfing the changes made in the Patents Act of 1990.

It was primarily inspired by a perceived desire to bring Australia’s patents legislation into closer conformity with international standards, particularly those of the United States and Europe. In both of those jurisdictions, patents have been harder to secure, with Australia’s relatively low bar proving an anomaly.

“The problem was that there were inventions patented in Australia that would not be patentable overseas, particularly in Europe and the US,” says Caine. “Or that the scope of claim that you would get for an invention in Aust would be broader than the scope of claim you’d get overseas.”

In addition to ‘raising the bar’ for patents in Australia, another aim of the reform was to provide a more comprehensive research exemption, which has been called for particularly in the life science community for some time.

The concern was that certain patents restricted the ability of researchers to investigate genuinely scientific matters for non-commercial reasons. Prior to this reform, there was no explicit exemption for researchers to do so without exposing themselves to the risk of infringing intellectual property.

The bill also tweaks many other aspects of our patent legislation, streamlining some processes and closing some loopholes. Any organisation, whether commercial or non-commercial, that employs patents needs to be aware of how the changes will affect the way you protect your inventions.

Higher bar

One of the primary tools for raising the bar for awarding a patent in Australia is changes made to how rigorously patents are assessed in terms of exhibiting an inventive step. The provision for assessing prior art has also been tightened, bringing both aspects in line with foreign patent systems.

Inventive step is currently judged against the background of common knowledge in Australia. This provision has been broadened in the new legislation to include common knowledge worldwide, thus making patents easier to challenge by recourse to a foreign expert.

Changes have also been made to the prior art assessment, which potentially broadens the sources of information that can be drawn upon to claim prior art, and thus reject a patent application.

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The implications are that new patent applications need to be more rigorously checked against common knowledge worldwide and against sources that might constitute prior art.

Another change is a tightening of the requirement for demonstrating the utility of an invention, largely targeted at preventing overly speculative patents. As such, it will no longer be sufficient to provide a few examples of use and yet apply for a patent that covers broader grounds than have been explicitly demonstrated.

This has particular significance for life science companies, where the patented invention might be a molecule, the properties and uses of which are yet to be fully revealed, says Caine.

“For example, someone might have identified three chemical compounds that have interesting biological activity,” says Caine.

“They then might file a patent application directed towards 1010 compounds with a general structure. If you take a claim like that over to the US or Europe, they’d make you narrow the claim to more closely correlate to actual contribution made. But in Australia there was no provision to reject such a claim. If there was something missing from our law that really needed to be fixed, it was this ability for the Patent Office to reject an unduly speculative claim.”

Another refinement is empowering the Patents Commissioner to have greater ability to reject patents that would likely be struck down in court. Under the present legislation, the Commissioner had a lower bar to accept a patent application, only rejecting them if they were clearly invalid.

However, courts operated to a higher standard, looking instead at the balance of probabilities as to whether a patent was valid or not. This meant that some borderline applications could be passed by the Commissioner only to be challenged and invalidated in court. The new legislation applies the same balance of probabilities standard used in court across all stages of the patent process.

“This is a big change,” says Caine. “Currently, if there’s difficulty getting a case through, you can argue to the examiner that there is some doubt, so it should be allowed. But you now have to do better than that. So if the examiner has made a reasonable case for why the application shouldn’t be allowed, you have to counter that with a good argument, which makes it more difficult to get borderline applications through.”

This change could have a particular impact on biotechnology companies, says Caine. “Biotech has a higher level of unpredictability about it compared to the mechanical fields. There’s just more predictability about whether something described in mechanical terms is going to work.

But when you’re talking about how things are going to interact with a biological system, there’s a lot that a potential drug can do. How can you be sure that every molecule in the claim will work? This means biotechs will have to convince the examiner that the level of unpredictability is not undue.”

Other changes in the legislation streamline the patent application process, promise faster response times by the patent office and close a few loopholes that were known to be exploited. One such loophole was using divisional applications – where an original application was split into a number of individual patents – to side step challenges to patent applications. A shorter deadline for the filing of divisional patents means they can no longer be filed from applications that are under opposition.

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Out of bounds

One area where the new legislation relaxes the current restriction on patents is in the area of research. There is an existing research exemption in the present legislation that only applies to achieving regulatory approval.

This was intended to allow pharmaceutical companies to do work on a patented drug in advance of the patent expiring without violating any intellectual property. However, a new research exemption has been included in the new legislation. “The research exemption is as broad as we possibly could have,” says Caine.

A new non-pharmaceutical regulatory exemption now appears to offer a blanket exemption from patent infringement to any activity involved in gaining regulatory approval even where use of the patented invention could reasonably be avoided. According to Caine, this could prove a pickle for companies that have patented tools that can be used for these purposes, obviating their patent protection in these contexts.

The new research exemption includes any research conducted on a patented invention for purely experimental purposes. This only applies to the subject of the patent itself, however. This means it’s possible to investigate how an invention functions, whether an invention works as described in the patent, and whether it can be improved. It does not mean an invention can be used for other research not related to the contents of the patent itself.

As such, a lab could investigate whether a patented molecule – say a drug that treats a specific form of cancer – could be used to treat a different indication. But it couldn’t use a patented invention – say an assay – to improve one of its own products.

Caine expects this amendment to be welcomed by the life sciences community, although it will take some time to assess the implications of the exemption for regulatory approvals, and whether the legislation draws a sufficiently unambiguous distinction between commercial and non-commercial activities.

Act now!

Overall, the legislation significantly tightens the patent application process, making it more difficult to push through inventions that are somewhat speculative or borderline, or which are likely to be quashed in court.

This doesn’t necessarily affect organisations that are accustomed to filing patents in multiple jurisdictions – because they’d already be preparing applications according to the more stringent rules of the US and Europe – but it does affect organisations that filed primarily in Australia.

Caine’s recommendation to life science companies and organisations thinking of filing a patent now is simple: act now. “Really think about filing under the current law, because you’ll get broader claims here in Australia,” he says. That means getting in before the 15 April 2013 start date.

It will also be important to request an examination by this date so the application will be assessed using the current rules. As divisional applications will no longer be able to be filed while an application is under opposition, it’s worth filing them early too, if needed.

If you are to file after the commencement of the new legislation, then make sure you have all the information and examples you need to clear the higher bar. “Get as many examples of your invention as possible,” says Caine.

“Try to exemplify throughout the breadth of your claims. Really, it’s the same advice we give today for organisations that want to file in the US and Europe. It’s the same advice, it’s just that it will now apply to their Australian patent.”