22 Feb 2011

ACIP report into patentability goes some way to clarifying patent law

The Advisory Council on Intellectual Property has released its Report into Patentable Subject Matter, and its recommendations, while not radical, would go some way to clarifying the law of patents in Australia if adopted. Of particular interest is the new exclusion from patentability that it proposes, which could have significant effects on the patentability of biological materials.

The Australian Government has not yet responded to the recommendations in detail, so it is still unknown how many – if any – will be made law.

A general exclusion to patentability to deal with ethical concerns

Currently, a patent application can be refused if it would be "generally inconvenient" (language dating back to a 17th century English statute), but there is some doubt about what that actually means – is it limited to ethical concerns, or does it cover economic concerns too? How is it assessed?

This issue of the ethics of the patent system is currently a very live issue with the international debate over the patentability of biological materials and, closer to home, the Gene Technology Corp case currently before the Federal Court of Australia.

Rather than list more specific exclusions, or relying upon the nebulous concept of "general inconvenience", ACIP recommends a general exclusion for "an invention the commercial exploitation of which would be wholly offensive to the ordinary reasonable and fully informed member of the Australian public."

"Wholly offensive" seems to set quite a high bar, but as it's not a term generally used in patent law, it might need some elucidation by the courts before we really understand how this proposed exclusion would operate. In the meantime, patent examiners would be placed in the very unusual position of having to determine what the “ordinary reasonable and fully informed” citizen may think. ACIP suggests this problem be overcome by allowing the Patents Office to seek advice from any person it “considers appropriate”. No doubt this could become fertile ground for litigation.

What is "patentable subject matter"?

Currently the Patents Act says that an "invention" is only patentable if it is “a manner of manufacture”. This language again dates back to that old English statute. Australian courts have consistently interpreted this phrase far more broadly than its literal meaning would suggest.

ACIP suggests updating the Patents Act so that the language of the legislation is consistent with the way in which this requirement has been interpreted by the courts.

This definition, "an artificially created state of affairs in the field of economic endeavour", comes from the High Court's decision in National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252.

Under it, patentable subject matter must

  • have properties that create an artificial effect in the physical world, that is, there must be a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation; and
  • be of economic significance in that it must belong to the useful arts, that is, it must be in the field of economic endeavour, be of utility in practical affairs, provide economic utility, or there must be some useful result or commercial application.

Patent applicants would no longer get the benefit of the doubt

Examiners currently apply two different standards of proof when assessing whether a patent can be granted.

While they must be satisfied that the invention meets the requirements of novelty and inventive step before accepting an application, when it comes to the other grounds they give the applicant the benefit of the doubt, which is a much lower standard of proof.

ACIP recommends that the Patents Act be amended to require the Patents Office to be satisfied that an invention is a patentable invention before accepting an application for a standard patent or certifying an innovation patent.

It says the effect of this change would be that:

  • "the Patents Office would continue to assess the patentability requirements of novelty, inventive step and innovative step ‘on the balance of probabilities’; and
  • the standard for determining if an invention satisfies the other patentability requirements would change, from the ‘benefit of the doubt’ about the patentability of an invention being given to the applicant, to the applicant needing to satisfy the Patents Office that the invention is patentable ‘on the balance of probabilities’."

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.