We recently published an article on the potential impact on the Productivity Commission’s Inquiry Report on Intellectual Property Arrangements (Report) on Australia’s innovation economy. The Australian Government has now responded to the Report, supporting the Commission’s recommendations to reform the patent system, but stopping short of embracing the extensive copyright overhaul recommended in the Report, considering further research and consultation is necessary.

In this article, we consider the Government’s responses to some of the Report’s key recommendations, and the potential implications of these responses.

Responses to the key recommended amendments to Australia’s patent regime

  • The Government supports raising the inventiveness threshold for the grant of patents to align with the more stringent ‘obvious to try’ test applied by the European Patent Office. This will mean the current ‘scintilla of invention’ test will be insufficient to meet the inventiveness threshold. As noted in our earlier article, given the recent substantial increase in the requirements for patentability introduced in 2014, this legislative change is arguably premature and possibly unnecessary, and has the potential to discourage investors from seeking patent protection in Australia.
  • The Government supports abolishing the innovation patent system, and will seek legislative amendments to implement this recommendation while maintaining existing rights. The Government argues that more targeted assistance would better achieve the original intentions behind the introduction of the two-tier system, which was to stimulate innovation by Australian SMEs. Our earlier article highlighted the value of the innovation patent system in allowing patentees to obtain an enforceable right quickly, which will unfortunately be lost with this abolishment.
  • The Government notes the Commission’s recommendation to increase patent renewal fees with the intention of promoting broader IP policy objectives rather than cost recovery. However, the Government considers the current fee structure adequately balances innovation with cost recovery policy objectives, a response which will be welcomed by patent holders as any fee increase could have been seen as a simple fee grab.

Responses to the key recommended amendments to Australia’s trade mark regime

The Government supports reducing the grace period for challenging non-use of trade marks from 5 to 3 years to manage decluttering of the Trade Marks Register. This will likely lead to an increase in non-use applications which may help brand owners remove unused marks.

  • The Government supports in principle requiring a statement of ‘use’ or ‘intention to use’ a mark at application, registration and renewal. IP Australia will undertake further research to determine the extent of clutter on the Trade Marks Register which will inform the development of reforms, potentially including the introduction of such a requirement.
  • The Government does not support removing the presumption of registrability, disagreeing with the Commission’s suggestion that it is unreasonably difficult to reject a mark on these grounds.
  • The Government supports in principle linking the Australian Trade Mark Search database with the business registration portal. However, it notes that the effectiveness of automatic warnings is reliant on the sophistication of available technologies, and there is a risk such warnings may not bring all relevant marks to the business name applicant’s attention.

Responses to the key recommended amendments to Australia’s copyright regime

  • The Government notes the recommendation to introduce a fair use exception to copyright infringement, and will further consider this recommendation in the context of wider copyright reform. The Government will publicly consult on potential copyright reforms in early 2018, allowing time to properly consider the complexities of possible amendments and gather information on the regulatory impact of any changes.

Next steps

IP Australia is now inviting written public submissions by 17 November 2017 on the following five IP policy matters:

  1. Amending the inventive step requirements for Australian patents;
  2. Introducing an objects clause into the Patents Act;  
  3. Amending the provisions for Crown use of patents and designs;
  4. Amending the provisions for compulsory licensing of patents; and
  5. Introducing divisional applications for international trade marks.

These amendments are proposed for inclusion in a Bill slated for introduction to Parliament in 2018, and IP Australia will further consult on the other measures in the Government’s response later this year.

Before any final changes are made, we hope they are considered within the context of the Government’s stated aim of creating a strong, IP-rich economy, and that decisions are not made to restrict IP holders rights in the mistaken belief that we are a country of net IP users, not generators.