Patent Overview: an introduction to the patent system

What is a Patent?

Patents are governed by Patents Act 1990 (Cth) ('PA“). The most recent amendment to the patent legislation is the Intellectual Property Laws Amendment (Raising The Bar) Act 2012 (Cth).

A patent is:

  • a grant by the Crown (the Commonwealth government);
  • of the exclusive right to exploit an invention ('exploit' means a right to prevent others using the invention);
  • throughout the patent territory (territorially limited – Australia);
  • for the duration of the patent (20 years for a standard patent).

Examples of Granted Patents

Products:

  • Ball point pen;
  • Victa lawn mower;
  • Computer software;
  • Synthetic genes;
  • Orbital engine
  • Cochlear's Bionic Ear;
  • Water purification devices.

Annotated drawings often from part of patents.

Territorial Principle

A patent for an invention gives a monopoly within the terrritory of the country which grants it. Outside that territory, it has no force or effect.

*Norbert Steinhardt and Son Ltd v Meth* (1961) 105 CLR 440, 443-444 (Fullagar J ):

'The English Patents Act relates exclusively to English patents, and the infringements which it makes unlawful are infringements of English patents only. In the same way, the Australian Patents Act relates exclusively to Australian patents, and the infringements which it makes unlawful are infringements of Australian patents only. If, therefore, an Australian patentee sues in Australia for an infringement alleged to have been committed in England, and it is asked whether the act complained of was actionable in England, the answer must be: No. For his Australian patent gives him no monopoly in England, and what the defendant has done in England is perfectly lawful according to English law.'

Kinds of Patents & Duration

A standard patent requires an inventive step. Its duration is for 20 years from the date of the patent (PA s 67).

An extension of up to five years can be sought for pharmaceuticals (PA ss 70 - 79A). Pharmaceuticals require regulatory approval before they are sold to the public and approvals can only be sought during the patent term, so patentees are compensated for the time taken to obtain regulatory approval.

An innovative patent requires an innovative step (lesser degree of inventiveness). Its duration is for 8 years from the date of the patent (PA s 68)

Duration is measured from the date the complete specification is filed (PA s 65).

Rationale of the Patent System

It is usually accepted that there are two main goals of the patent system. First, to encourage innovation: patents enable inventors a period of monopoly in which to exploit their invention and recoup their costs. This is not a reward for an inventor’s natural rights, but rather so that the public may ultimately benefit from the technological advancement that invention brings. Exclusivity is, in this sense, a necessary evil - it restricts the use of new inventions in order to encourage them.

The second goal of the patent system is to disseminate new knowledge. Inventors are encouraged, through a statutory monopoly, to publish a full description of their new inventions and explain, in the patent specification, exactly how it works. The patent system is designed so that the incentive to publish (and gain protection) is greater than the inventor's incentive to keep new inventions secret.

Brandon Vagnini on the goals of the patent system

Overview of Patent Law

The object of patent law is to encourage invention and disseminate new knowledge. For an invention to be patentable, the following elements must be met:

  • Patentable subject matter
  • Product or process
  • Specific practical application
  • Not an excluded category of subject mattter
  • Novel (not publically available)
  • Inventive step (for standard patents) - not obvious to a person skilled in the art
  • Innovative step (for innovation patents) - makes a substantial contribution to the working of an invention, according to a person skilled in the art
  • Useful - must work according to specification (does not require commercial viability)
  • No secret use - i.e. no commercial use of the invention, although testing is allowed.
  • Invention must be disclosed in the patent application.

Patent law seeks to achieve a balance between the private right to exploit an invention (an incentive granted by the State so that the public can benefit from new inventions), with the public benefit of adding to the store of public knowledge and increasing public access to new products and processes.

Origins of Patent Law

Patents were systematically granted in Venice from 1450, where they issued a decree by which new and inventive devices had to be communicated to the Republic in order to obtain legal protection against potential infringers. King Henry II of France introduced the concept of publishing the description of an invention in a patent in 1555. Patents were granted by the monarchy and by others institutions like the “Maison du Roi” and the Parliament of Paris. The novelty of the invention was examined by the French Academy of Sciences.

By the 16th century, the English Crown would habitually grant letters patent for monopolies to favoured persons (or people who were prepared to pay for them). This power was used to raise money for the Crown, and was widely abused, as the Crown granted patents in respect of all sorts of common goods (salt, for example). Consequently, the Court began to limit the circumstances in which they could be granted.

Statute of Monopolies

After public outcry, James I of England was forced to revoke all existing monopolies and declare that they were only to be used for “projects of new invention”. This was incorporated into the Statute of Monopolies in which Parliament restricted the Crown's power explicitly so that the King could only issue letters patent to the inventors or introducers of original inventions for a fixed number of years. It also voided all existing monopolies and dispensations with the exception of:

...the sole working or making of any manner of new manufactures within this realm to the true and first inventor and inventors of such manufactures which others at the time of making such letters patent and grants shall not use... (Section 6)

The Statute of Monopolies voided monopolies on the principle that monopolies are generally anti-competitive. The main exception to this principle is that sometimes monopolies are required in order to encourage new inventions or products. So while the Statute of Monopolies declared that all monopolies were void, it specifically exlcuded any patent or grant of privilege that was limited in duration (14 yrs here, the duration of two period of apprenticeship) that covered any new manner of manufacture (new product/process), was territorially limited, and granted directly to inventor (not importers). The Statute imposed furhter restrictions that the patent granted could not be contrary to law (particularly competition law), raise existing price of commodities, harm trade in general products, or be 'generally inconvenient'.

The Statute of Monopolies became the foundation for later developments in patent law in England and elsewhere. The English patent system evolved from its early medieval origins into the first modern patent system that recognised intellectual property in order to stimulate invention; this was one of the crucial legal foundations upon which the Industrial Revolution could emerge and flourish.