Patent Overview: an introduction to the patent system

Patents are governed by Patents Act 1990 (Cth) (PA). A patent is a grant by the Crown (the Commonwealth government), which gives the owner of the patent the exclusive right to exploit an invention ('exploit' means a right to prevent others using the invention). This exclusive right applies throughout the patent territory (territorially limited – Australia), for the duration of the patent. The period of protection provided by the patent depends on the type of patent. The most recent amendment to the patent legislation is the Intellectual Property Laws Amendment (Raising The Bar) Act 2012 (Cth).

Examples of Granted Patents

There are many famous and notable products which were granted patents. These products include:

  • 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.

Kinds of Patents & Duration

There are two types of patents: a standard patent and an innovative patent. Each of these will be explained in turn.

Standard Patents: A standard patent requires an inventive step. An inventive step means that the invention is not an obvious thing to do for someone with knowledge and experience in the technological field of the invention. The invention must differ from existing technology. A standard patent will only be granted after a period of examination to ensure the patent meets the legislative requirements. This process can take from six months – several years depending on the type of protection and circumstances. The period of protection afforded by a standard patent is up to twenty years from the date of the patent (or up to 25 years for pharmaceuticals). 1)

An extension of up to five years can be sought for pharmaceuticals. 2) 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.

Not all pharmaceutical patent applications are automatically given the extension of five years. Three requirements must be met to obtain an extension for a pharmaceutical patent:

First requirement:

1a) Disclose and claim a pharmaceutical substance per se, including compounds, active metabolites, a composition or a mixture of substances. 3)

For a claim to related to a pharmaceutical substance per se, it must be unqualified by process, temporal or environmental components.

1b) Pharmaceutical substance produced by a process that involves the use of recombinant DNA technology.

Second requirement:

  1. Must be included in the Australian Register for Therapeutic Goods (ARTG). A substance can be included in the ARTG if it is included in some way. The substance does not have to be explicitly named as an active ingredient to be considered ‘included’ and can be an impurity, which has been noted.

Final requirement:

  1. The final requirement for a pharmaceutical patent is that regulatory approval for the pharmaceutical substance must have occurred more than five years after the date of the patent.

There are specific rights that are valid during the extended term of the patent. These include that a patent will not be infringed if a person exploits the pharmaceutical substance a purpose other than a therapeutic purpose or if a person exploits any form of the invention other than the pharmaceutical substance per se.

The extended period of protection only protects the pharmaceutical substance itself.

Video overview by Fern Doyle on Requirements for extension of time for pharmaceutical patents.

Innovative Patents:

An innovative patent is suitable for inventions with short market life. An innovative patent requires an innovative step, which involved a lesser degree of inventiveness compared to the standard patent. An innovative step is one where the invention is different from existing technology and provides a substantial contribution to the working of the invention. The innovation patent seeks to protect incremental advances in technology as opposed to ground-breaking technology (which would be covered under a standard patent).
The duration of an innovative patent is for the period of eight years from the date of the patent. 4) Innovative patents can be granted within one month of filing, as there is no requirement for examination.

Video overview by Maddison D onThe difference between a standard patent and an innovation patent.

IP Australia ‘Quick guide to innovation versus standard patents’ CC-BY 4.0 (https://www.ipaustralia.gov.au/patents/understanding-patents/types-patents).

Standard Patent Innovation Patent
Your invention must: Be new, useful and involve an innovative step. Be new, useful and involve an inventive step.
The application should include: A title, description, up to five claims, drawings (if applicable), an abstract and forms. A title, description, any number of claims, drawings (if applicable), an abstract and forms.
A patent is granted if: The application satisfies formality requirements (note: a 'granted' innovation patent cannot be enforced unless examined). The application is examined and found to satisfy the relevant requirements of the Patents Act 1990.
Examination: Optional. Examination can be requested by you or anyone else. Mandatory. The relevant requirements of the Patents Act 1990 must be met before a patent is granted. Can only be requested by the applicant.
Certification: Is given if the innovation patent complies with the relevant requirements of the Patents Act 1990 in examination. Only after certification can the patent be enforced. N/A
Publication in the Australian Official Journal of Patents: At grant and again at certification. 18 months from earliest priority date and again at acceptance.
Protection period: Up to eight years if annual fees are paid. Up to 20 years if annual fees are paid (or up to 25 years for pharmaceuticals).
How long does the process take? Approximately one month for grant. Six months for examination if you make a request. Six months to several years depending on circumstances.

*Duration of protection for both types of patents is measured from the date the complete specification is filed. 5)

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.

Video overview by Brandon Vagnini on The goals of the patent system.

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.

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. According to s6 of the Statute of Monopolies, all existing monopolies and dispensations were voided 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...

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.

Development of Patent Law in Australia

The notion of patent law, like many Australian laws comes from the Anglo-Saxton heritage of the UK. The letters patent was the first type of patent which was issued by the Crown. These letters patent provided the recipient with their rights to practice their trade or craft.

The States and Territories enacted the first patent laws in Australia independently. It wasn’t until 1903 that a Commonwealth Act was enacted, Patents Act 1903 (Cth.) This was enacted pursuant to the Constitution under s 51 (xviii). Since this time there have been a number of changes to the Patents Act. The current Act, which is in force, is a result of changing times in technology and innovation. Alongside the legislation is the Patents Regulation 1991 (Cth), which is positioned to compliment the Act.


1)
PA s67
2)
PA ss70 - 79A
3)
LTS Lohmann Therapie-Systeme Gmbh & Co KH [2002]
4)
PA s68
5)
PA s65
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