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25 Jun 2020

Innovations and Australia’s patent system – what lies ahead?

By Richard Hoad, Caitlin McCrum

Encouraging innovation amongst SMEs should be a priority for Australian industry policy, especially given the need to stimulate the economy following the COVID-19 downturn.

After many years of review and debate, the fate of the Australian innovation patent was sealed in February this year when the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020 passed into law.

When the innovation patent system was introduced in 2001, one of the objectives was to promote innovation amongst Australian small and medium sized enterprises (SMEs). However, in August 2017, the Federal Government accepted the Productivity Commission's recommendation that Australia abolish the innovation patent. This recommendation had been based on the Productivity Commission finding that the innovation patent system was in fact working against the interests of SMEs.

Notwithstanding the findings of the Productivity Commission, the abolition of the innovation patent system was contentious. There were a number of false starts due to a concerted campaign to reverse, or at least delay, the innovation patent’s death knell. Even now that legislation has been passed to abolish the innovation patent system, the innovation patent will have a very slow death.

Questions remain about what else may be done to encourage and promote SMEs to access and use the Australian patent system to their benefit. For this reason, the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020 included a requirement that the responsible Minister must initiate a review of the accessibility of patents for SMEs to examine at least:

  • the cost of applications for patents;
  • processing times of patents;
  • advice provided by the Australian Government with respect to the patent application process; and
  • awareness of the patent application process.

On 26 May 2020, Karen Andrews, the Federal Minister for Industry, Science and Technology, announced the launch of the review stating that "[t]he aim of this review is to make sure our patents system best supports the needs of SMEs, so Australian businesses can protect their inventions and operate with confidence in Australian markets and abroad."

Emeritus Professor Raoul Mortley AO has been appointed to lead the review. It is expected that the review will commence in the next few months and run for six months, with a final report to be provided to the Minster by 26 May 2021.

In addition to the review, the Federal Government announced that other SME-focused services will be introduced in the coming months. This will include:

  • SME case management – a service whereby dedicated IP Australia case managers will be made available to support Australian SMEs manage the patent application process;
  • SME fast track service – SMEs will have access to IP Australia’s fast track examination pathway on request, which means SMEs who want to fast track examination can get a report within eight weeks;
  • SME Portal – a new portal on IP Australia's website to support SMEs with tailored products and services and an IP portfolio management tool; and
  • SME outreach program – a program of SME-focused education services for regional areas.

Encouraging innovation amongst SMEs should be a priority for Australian industry policy, especially given the need to stimulate the economy following the COVID-19 downturn. In this context, the outcome of the review and success of the new patent initiatives directed to SMEs will be watched with interest.

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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.