Who does this affect?

Anyone involved in filing patent applications in Australia or anyone involved in a patent dispute in Australia.

What do you need to do?

Be aware of the impact of the decision on patent filing strategies or assess how the decision affects your position in litigation.

Author
Shyama Jayaswal  
Senior Associate

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Wayne McMaster  
Partner
T +61 3 9643 4407

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Robert Cooper  
Partner
T +61 3 9643 4405

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Sydney
Kim O'Connell  
Be aware of the impact of the decision on patent filing strategies or assess how the decision affects your position in litigation.

Brisbane
John Swinson  
Be aware of the impact of the decision on patent filing strategies or assess how the decision affects your position in litigation.

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A recent decision of the Federal Court of Australia has raised a potential limitation when relying on the grace period for divisional patent applications to excuse prior disclosures. The grace period in Australia provides that disclosures within 12 months “before the filing date of the complete application” are disregarded when determining the validity of a patent.

The decision held that a divisional patent application cannot rely on the filing date of its parent application when claiming the benefit of the grace period. As a result, since the prior disclosure often occurs more than 12 months before the divisional application is filed, this decision could lead to many divisional patents being held invalid where the parent application relies on the grace period.

This decision is only relevant to circumstances where there has been a public disclosure before the priority date of the parent application giving rise to the need to rely on the grace period. The decision does not change the normal situation where the divisional application is entitled to rely on the priority date of the parent application so that public disclosures after the priority date of the parent are not relevant to validity.

In Mont Adventure Equipment Pty Ltd v Phoenix Leisure Group Pty Ltd [2008] FCA 1476, Stone J was asked to determine a preliminary question:

In the context of a divisional application, is the “filing date of the complete application” within the meaning of reg 2.2(1A) of the Patent Regulations the filing date of the parent application or the filing date of the divisional application?

In this case, Mont Adventure filed a standard complete patent application within 12 months of offering for sale products which fell within the scope of the patent claims, that is, relying on the grace period. Mont Adventure then filed an application for a divisional innovation patent which was certified and formed the basis for the patent infringement proceedings against Phoenix Leisure Group. The divisional innovation patent application was filed more than 12 months after Mont Adventure offered its products for sale.

The judge answered the question: the “filing date of the complete application” within the meaning of reg 2.2(1A) of the Patent Regulations is the filing date of the divisional application.

There was no express finding in the decision regarding the validity of the divisional innovation patent but this answer effectively means that the divisional innovation patent will be invalidated by the patentee’s prior sales. Consequently, Mont Albert will need its parent standard patent application to be granted, which could be several years away, before it can enforce its rights against Phoenix Leisure Group. The time period for appealing this decision is still open.

This decision, if followed or upheld on appeal, removes the ability for valid patents to be divided off from a parent application if the parent application relies on the grace period in reg 2.2(1A) and the divisional application is not filed within 12 months of the earliest disclosure. As exemplified by the facts in this case, this means that in such circumstances it will not be possible to use a quick grant divisional innovation patent to stop alleged infringers whilst waiting for a standard patent application to be processed by IP Australia.

This is a significant change from the interpretation of reg 2.2(1A) which was understood by most patent professionals. If this interpretation is accepted (and the Patent Regulations are not amended), then it will be very important to check:

• when filing divisional applications whether the parent application relied upon the grace period
• when drafting patent applications relying on the grace period to ensure that the claims are not at risk of a lack of unity objection which could lead to the need to file a divisional application. That is, ensure that only one invention is included in any application relying on the grace period, and
• when analysing the validity of a patent, check whether the patent is a divisional from a parent application relying on the grace period.