Should innovation patents be kept?

Article  \  7 Jun 2017

There's been some recent comment about the usefulness of Australian innovation patents, and whether they should be kept. From my work with small businesses and individual inventors, I think innovation patents provide a useful and quick way to secure patent protection for patentees, especially those who would not qualify or are able to afford a standard Australian patent. So I'm in favour of them.

Innovation patents are Australia’s version of a second tier patent. In other countries these may be known as utility models. Innovation patents have a much lower threshold for inventiveness. The threshold is effectively novelty-plus. So it’s much easier to gain an innovation patent for a product that is not quite an invention.

The downside of an innovation patent over a standard patent is that the patent life is reduced to eight years (rather than the standard 20) and claims are limited to five only. Until recently, an innovation patent provided the owner all the other benefits of a standard patent and more.

As with most forms or registered IP, you can only sue and pursue damages or an account of profit once your patent is granted. However, an infringer may have been selling copy product before a patent is granted.

Up until recently, damages or an account of profit was able to be claimed back to the filing date of the innovation patent (or, in the case it was a divisional, to its parent filing date). If a pending patent owner found infringing product, they could carve off a tailored divisional innovation application and get it granted quickly. The granted innovation patent could then be used to pursue infringers, and claim relief back to the date of the original pending patent application.

The Full Court of the Federal Court of Australia changed the game on 3 April 2017 with its decision in Coretell Pty Ltd v Australian Mud Co Pty Ltd [2017] FCAFC 54. Now, the owner of an innovation patent gives up relief for infringement between the date of patent (filing date) and the date of grant. This means that the earliest date of entitlement to relief for infringement is the date of grant of the infringed innovation patent.

But let’s be honest, relief for infringement back to the date of the innovation patent didn’t seem right anyway – it was something that even standard patents couldn’t achieve. Standard patents can get relief back to their date of publication. Some innovation patents are filed many years after the standard patent from which it is divided was filed.

So, now that innovation patents have lost that advantage, do we still want them? The merits of Innovation patents are under attack from a number of sides, but I believe there is definitely a place for them.

Innovation patents are a way of providing incentives for those that might not meet the rigorous standards needing to be fulfilled to get a granted standard patent. Getting a granted standard patent is not quick, easy or cheap. Getting a granted innovation patent is far easier and more accessible to inventor and business owner on a very tight budget. Innovation patents often fulfil a client’s patent needs, when a standard patent is just not required or is out of reach.

I believe innovation patents can be even more useful if litigation is on the horizon, to complement a granted standard patent. But a patent owner needs to be wary of double patenting overlap with their standard patent and their parallel innovation patent.

I have filed a number of innovation patents, but every one has had its place and has served the client’s needs at that time. It would be a shame to see them go.