On 1 April 2002 amendments to the Australian Patents Act and Regulations came into force. The major driving force behind the changes was to increase the economic value of Australian patents by making patents harder to obtain and putting in place mechanisms which increase the likelihood of Australian patents being held valid during litigation.

DUTY OF DISCLOSURE

The most controversial aspect of the legislation is the new duty to disclose search results to the Australian Patent Office.

The sanction contained in the legislation for those who fail to comply is not, as some might expect, loss of the patent but rather removal of the patentee's ability to amend a granted patent to avoid prior art information of the type which should have been provided.

The effect of the legislation is that applicants must inform the Patent Office of the results of any documentary search conducted by or on behalf of the applicant anywhere, for the purpose of assessing the patentability of an invention, prior to the grant of a patent. The phrase "purpose of assessing patentability" is understood to have been adopted in an attempt to ensure that only material pertinent to patentability needed to be provided to the Patent Office. However, this "purpose" test does not provide clear guidance in practice.

• Example 1 - Before launching a product which embodies an invention which is the subject of a patent application, the applicant commissions a search for the purpose of determining whether the new product infringes any existing patents.
• Example 2 - An applicant regularly monitors the patenting activities of others in the field.

In both these cases, if documents are located which are relevant to the patentability of the invention, there is an argument that they do not need to be provided to the Patent Office because the purpose of conducting the search in each case was not for assessing the patentability of the invention. However, these sorts of searches are not conducted in a void and while it doesn't always happen in practice, in a perfect world, any relevant prior art which is located should be used to assess the patentability of an invention. Accordingly, to be on the safe side applicants should file all search results irrespective of the purpose for which the search was conducted because of the possibility that a Court will take a view that when such a search was conducted there was an underlying understanding that prior art might be used for the purpose of assessing patentability.

If the Courts were to go the other way in cases such as outlined above and excuse patentees from providing relevant information in such circumstances, there would be no guarantee that all relevant information would be brought to the attention of the Patent Office. With this in mind, it is strange that the legislators did not adopt a "material to patentability" test similar to the USA.

Another difficulty is that the prior art information must be provided in strict accordance with the regulations which leave little room for patent applicants to manoeuvre. The Regulations state that the applicant informs the Commissioner of the results of documentary searches by providing the following:

1. if a patent office has conducted a search and has prepared a report of the search - the report;
2. if a patent office has conducted a search but has not prepared a report of the search - a list of the documents cited by the patent office;
3. if the applicant or another party has conducted a search - a list of the documents that are the result of the search.

   The problem is that an argument can be run that if the applicant fails to provide the results in the specified manner, they have failed to "inform the Commissioner", even though the document had been brought to the Commissioner's attention. For example there are questions as to whether the applicant complies if:

   1. the applicant receives a number of identical search reports but only files one of them. Does the failure to file all of them cause a problems;
   2. the applicant compiles a list of search results and files them. However, some of the search results are taken from search reports of the type referred to under a) and these search reports are not filed;
   3. the applicant files a search report in a foreign language; or
   4. the applicant files an English list of the documents contained in a foreign language search report of the type referred to under a) but not the report itself.

Where a search falls into category c), the Australian Patent Office has indicated that not all documents need be listed, for example, intermediate lists of documents which are subsequently culled to provide a final list need not be provided. However, this is only the Patent Office's opinion and may not be binding on a Court.

All official search reports should be provided, notwithstanding that they may list documents already provided. This includes the International Search Report even though in most cases it forms part of the pamphlet! It is also necessary to provide a list of documents referred to in the specification if these were discovered as part of a search.

There is a grace period for filing search results for patent applications pending at 1 April 2002, which expires on 1 January 2003. After that time, applicants must file results with the Patent Office by the latest of when requesting examination, or six months after the search is completed (for innovation patents there is a three month time period). A search is deemed to be completed either on the date the applicant completes the search (for a search conducted by the applicant) or the date when another party informs the applicant or its representative (for a search conducted by the other party on behalf of the applicant). If search results are not provided within the prescribed period, the applicant may be able to seek an extension of time in some circumstances.

TIME FOR ACCEPTANCE

Where search results are filed shortly before the final acceptance deadline, the Commissioner will extend the final date for acceptance by at least three months if any further objections are taken.

RE-EXAMINATION

The Commissioner has been provided with the power to institute re-examination any time after acceptance. This will allow the Commissioner to deal with any prior art that may be brought to the Commissioner's attention after acceptance and prior to grant. It will also provide a framework for dealing with prior art which comes to the Commissioner's attention during an opposition which is subsequently withdrawn. The traditional "bar-to-sealing" process that the Commissioner previously initiated following opposition withdrawal will no longer be used.

INVENTIVE STEP

The problems with the new duty of disclosure requirements, have drawn attention away from some of the more significant changes to the Act, in particular the expansion of the test for lack of inventive step. For applications filed after 1 April 2002, assessment of whether the invention involves an inventive step will now include a determination of whether the invention is obvious in light of a combination of any two or more pieces of prior art information, being information that a skilled person could be reasonably expected to have ascertained, understood, regarded as relevant and combined. It seems that it should be easier to prove a case of lack of inventive step than under the pre-1 April 2002 legislation.

ABSOLUTE NOVELTY

As a further part of varying the patentability standard, the prior art base against which novelty and inventive step are determined has been amended to include for the first time acts (e.g. use) which take place outside of Australia. In other words, Australia now has absolute novelty requirements. This change applies to applications filed after 1 April 2002.

BALANCE OF PROBABILITIES

The final aspect of raising the patentability standard is that in the examination of a patent application the Commissioner is now to apply a so-called "balance of probabilities" test, abandoning the previous "benefit of the doubt" test. Under the new provision, the Commissioner must accept a patent application only if the Commissioner "is satisfied that the invention" is novel and inventive. Thus, the burden of proof now shifts to the applicant to substantiate that an invention is novel and inventive. In past practice, doubtful cases were accepted because the Commissioner gave the patent applicant the benefit of the doubt. It will be interesting to see how the new test unfolds.

GRACE PERIOD

The legislation introduces a 12-month period of grace for publication or use of the invention by or with the consent of the applicant occurring in the period of 12 months before the filing date of a complete patent application. Thus, a complete application will need to be filed within 12 months of any disclosure made by a patent applicant. However, the infringement provisions of the Act have also been amended to protect third parties who make a product or use a process during the grace period, in that they may continue to do so regardless of any patent granted for the product or process.

The grace period is more restrictive than the US grace period, and only applies to disclosure made by or with the consent of the patent applicant.

EXTENSION OF TIME

A new extension of time provision has been added to the Australian Patents Act. This provision is additional to the existing extension of time provisions of the Act. Under the new provision, the Commissioner must grant an extension of time if the Commissioner is satisfied that the person concerned took due care, as required in the circumstances, to ensure the doing of a relevant act. There are restrictions as to the time when this provision applies. The provision can only be invoked within two months after the circumstances that prevented the doing of the relevant act. In addition, a maximum of 12 months' extension is allowable. Extensions falling outside of these time periods must therefore be applied for using the previous extension of time provisions. Assuming an application falls within these time constraints, it may be appropriate to use the new provisions where the applicant or attorney does not wish to admit the making of a mistake on the written record. Further, the Commissioner has no discretion to refuse an application under this provision once "due care" has been established.

NATIONAL PHASE ENTRY DATE

Australia has amended its laws such that the national phase entry date is now 31 months from the priority date regardless of whether International Preliminary Examination is requested or not.

DIVISIONAL APPLICATION ANNUITIES

Under the previous law, when filing a divisional patent application, an automatic 12-month grace period for the payment of any annuities due was provided. That provision has now been abolished, and annuities for divisionals are now payable at the same time that the ultimate parent annuity is payable. Thus, it is possible that an annuity may fall due on the same day or shortly after the filing of the divisional application. Strangely, while the automatic 12 months, grace period for annuities on filing divisional, standard patent applications has been abolished, a one month grace period has been introduced for annuities due on filing divisional innovation patent applications available but these require lodgement of evidence to justify the extension of time.

USE OF ABSTRACTS

A new provision has been added that an abstract may be taken into account in determining whether matter was in substance disclosed in a specification as filed. In other words, disclosure in the abstract may be used as the basis for making an amendment to the specification, including the claims.

INTERNATIONAL-TYPE SEARCHES

After filing an Australian provisional patent application, it is reasonably common for local applicants to request an international-type search (under Article 15(5) of the PCT). The provision governing Article 15(5) searches has now been amended to allow applicants to request such searches up to ten months from the filing of the provisional application and obtain a partial refund of the International search fee if they subsequently file a PCT application.