Fabricating Invention: The Patent Malfunction of Australian Patent Law

By Moir, Hazel V. J. | Agenda: A Journal of Policy Analysis and Reform, April 1, 2013 | Go to article overview

Fabricating Invention: The Patent Malfunction of Australian Patent Law


Moir, Hazel V. J., Agenda: A Journal of Policy Analysis and Reform


Abstract

Despite advice to parliament that patents are granted only for 'a significant advance over what was known and what was available to the public'^sup 2^ the evidence shows this is not the standard used. The actual standard is a scintilla - a marginal difference from what is known. The consequence of such a low standard is that thousands of patents are granted for things that contribute no public benefit. Such trivial patents can impede genuinely inventive companies.

'The production of the knowledge of how to do in a somewhat different way what we have already learned to do in a satisfactory way would hardly be given highest priority in a rational allocation of resources.'

(Machlup 1958: 51)

The reform process

In 2009 the Australian government - through IP Australia - began a process to reform the standard patent system. This covered a range of issues but the focus of this article is the reform of the 'inventiveness standard'. IP Australia commented that there were 'a number of areas in which Australia's requirements for inventive step are set at a lower level than those of other jurisdictions' (IP Australia 2009a: 9).3 Particular concerns were 'allowable existing knowledge' and the 'test for inventiveness', as each can lead to the grant of patents for trivial inventions.

The reform proposals were that:

* global common general knowledge replace Australian common general knowledge;

* statutory restrictions on allowable existing knowledge ('prior art') be removed;4 and

* one particularly low inventiveness test be replaced (see below).

The subsequent legislative amendments - the so-called Raising the Bar amendment bill - implemented the first two of these measures, but not the third. Removing the restrictions on allowable existing knowledge should reduce the volume of trivial patents granted in low-technology fields. But these changes will not affect trivial patenting in high-technology fields - there are no cases where restrictions to prior art have been used to uphold the validity of trivial patents in high-technology fields.

In 2009 IP Australia had proposed increasing the inventiveness threshold test from whether a skilled person 'would be led directly as a matter of course to try a particular approach with a reasonable expectation of success' ( Lockwood v. Doric [2007] HCA 21, emphasis added) to 'obvious for the skilled person to try a suggested approach , alternative or method with a reasonable expectation of success' (IP Australia 2009a: 12-13, emphasis added). Such a change would have raised the inventive step from a scintilla to a small amount - a small step in the right direction. IP Australia later changed its position, advising that concerns about the low height of the inventive step would be addressed 'through restating the guidelines for inventive step in the Examiners' Manual and through more rigorous application of the inventive step tests during examination, rather than through changes to the law' (IP Australia 2009b: 12). On its face this reliance on the Examiners Manual seems dubious. Are Federal and High Court judges likely to accept that doctrines (policies) they have established are over-ridden by changes to a manual?5

This article proceeds by reviewing why the inventiveness proxy is so central to economic balance in a patent system (Section 2). A consideration of how inventiveness is administered shows that the threshold for grant of a patent is set at a very low level. Section 3 presents empirical evidence on the quantum of inventiveness required for a standard, demonstrating that this is indeed a scintilla not 'a significant advance in what is known'. With such a low threshold a very large proportion of granted patents will be for inventions with no spillover benefits. In the absence of systematic data on the cost of trivial patents, section 4 considers some limited evidence from legal decisions about the costs of trivial patents. …

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