Who does this affect?

Anyone involved in patent portfolio strategy or a patent dispute in Australia.

What do you need to do?

Consider innovation patents as part of their filing or litigation strategy.

Author
Wayne McMaster  
Partner

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Wayne McMaster  
Partner
T +61 3 9643 4407

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The Federal Court has handed down a decision relating to the enforceability of innovation patents. This is the first substantive judicial decision regarding the definition of ‘innovative step’ which is a requirement specific to the validity of innovation patents.

Since innovation patents were introduced into our legislation on 24 May 2001 by the Patents Amendment (Innovation Patents) Act 2000 (Cth) they have seldom been considered by our Courts hence there is relatively little judicial guidance regarding the scope of their protection.

In Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 1225, Gyles J, considered three innovation patents for roadside posts for supporting signage or delineating paths, roadways or boundaries. The three innovation patents were granted on applications divided from a standard patent application.

In a finding that turned largely upon construction of the relevant claims His Honour held that Dura-Post’s ‘Exy-Drive Steel Flex’ post infringed the patents.

Dura-Post’s cross-claim for revocation was based on the grounds that claims in one or more of the patents did not relate to a manner of manufacture, or lacked fair basis, novelty, utility or clarity. They were unsuccessful on all these grounds.

Dura-Post’s cross-claim for revocation also included the ground of lack of innovative step contrary to the requirements of s.7(4)-(6) of the Patents Act 1990. They succeeded on this ground in respect of claims in two of the innovation patents. When considering whether an innovative step subsisted, His Honour prescribed the following steps:

• Compare the invention as claimed in each claim with the prior art base and determine the difference(s),
• Look at the difference(s) through the eyes of a person skilled in the relevant art in the light of the common general knowledge as it existed in Australia before the priority date, and
• Ask whether the invention as claimed only varies from the kinds of information set out in prior art (of s.7(5)) in ways that make no substantial contribution to the working of the invention.

According to His Honour, the proper construction of the term ‘substantial’ in this context will depend on the situation - it may mean ‘great’ or ‘weighty’ in some situations, or ‘more than insubstantial’ or ‘of substance’ in others.

Comments

In view of the speed with which innovation patents are granted and certified (often as little as 1 to 3 months), they potentially provide a fast route for pursuing infringers. In the present case the innovation patents were divided out, granted, certified and litigated before the parent standard application achieved grant of Letters Patent (and thus became enforceable against alleged infringers).

However the value of this strategy has been constrained by concerns regarding enforceability of innovation patents. Furthermore, while it has been generally accepted that an ‘innovative step’ requirement for an innovation patent constitutes a lower level of inventiveness as compared with an ‘inventive step’ for a standard patent, the difference has never been judicially stated.

This case demonstrates that it is possible to successfully follow the aforementioned strategy, and provides judicial interpretation of the concept of ‘innovative step’. The case also provides a clear distinction between the term ‘inventive step’ as applied to standard patents and ‘innovative step’ as applied to innovation patents. An innovation patent can protect an invention that has a point of differentiation that provides a substantial contribution to the working of the invention, even if that point of differentiation is obvious. This is valuable guidance to those who draft patent specifications or provide advice on their interpretation, validity and infringement.