Agreement between the Government of Australia and the International Bureau of the World Intellectual Property Organization in relation to the functioning of the Australian Patent Office as an International Searching Authority and International Preliminary Examining Authority under the Patent Cooperation Treaty
This Chapter reviews the Agreement between the Government of Australia and the International Bureau of the World Intellectual Property Organization in relation to the functioning of the Australian Patent Office as an International Searching Authority and International Preliminary Examining Authority under the Patent Cooperation Treaty (the Agreement). The Agreement was tabled in the Parliament on 8 May 2018 and is expected to enter into force by 1 January 2019.
The Australian Patent Office, a current function of IP Australia, has been an International Authority under the Patent Cooperation Treaty (PCT) since 31 March 1980.
A minor treaty process was undertaken in October 2017 to enable a 12-month extension of the Agreement between the Government of Australia and the International Bureau of the World Intellectual Property Organization in relation to the functioning of the Australian Patent Office as an International Searching Authority and International Preliminary Examining Authority under the Patent Cooperation Treaty (Existing Agreement) as it was due to expire on 31 December 2017. This extension, until 31 December 2018, was agreed to allow sufficient time for the Australian Government to undertake a major treaty process in 2018 on this Agreement. This Agreement renews the Existing Agreement on largely the same terms, subject to the technical changes.
The National Interest Analysis (NIA) explains that the Agreement must enter into force by 1 January 2019 to provide for continued operation of the Australian Patent Office as an International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA). The Agreement will continue until 31 December 2027. The NIA states that, if the domestic treaty process is concluded, the Agreement will be signed before 31 December 2018, with the Agreement to enter into force by 1 January 2019.
Reasons for Australia to take the treaty action
The PCT, which facilitates the filing and assessment of a patent application in multiple jurisdictions, provides for the appointment of ISA and IPEA, jointly an International Authority. The PCT provides for the Assembly of the International Patent Cooperation Union, an organ of the World Intellectual Property Organization (WIPO) General Assembly, to appoint a national patent office as an International Authority, subject to an agreement being concluded between the International Bureau of WIPO and the relevant office. In the case of Australia, the agreement is between the Government of Australia and the International Bureau.
Under the PCT, the Agreement effects the appointment, and provides for the functioning of, the Australian Patent Office as an International Authority, and is necessary to allow IP Australia to be a competent search and examination authority for ‘international applications’ for patents filed from Australia.
Almost a quarter of IP Australia's total patent workload comes from its role as an International Authority. IP Australia explained that it processes approximately 30,000 applications annually, of those approximately 3,000 file PCT applications each year.
According to the NIA, the purpose of the PCT is to simplify and streamline the process of filing for patent protection in several countries via a single international patent application. This serves to avoid having to meet the various requirements that can be found in different jurisdictions. As of April 2018, the PCT has 152 contracting states. IP Australia clarified that the process enables the client to make a single application to start the process but that to obtain an international patent the client must then follow through in each individual country:
In most cases you would have to file an application with IP Australia. That application would serve as an application in all 152 contracting states to the PCT. In order to actually advance to a patent in any one of those countries … you would have to enter the national phase in that country. So you would need to have, probably, a local representative in that particular country to deal with the patent office in that country.
The NIA notes that use of the PCT provisions saves time, work and money for any person seeking a patent in a number of countries. The appointment of International Authorities to conduct the required international search and examination functions, avoids unnecessary repetition of this work in each country. The NIA suggests this provides significant cost savings to patent applicants. IP Australia confirmed this assessment:
When you file in Australia, we will search and examine on the basis of Australian law and the international system, and that’s generally set out by the TRIPS protocol- the trade related aspects of intellectual property under the WTO. That sets a standard base. Then countries have their own bits and pieces. So we will provide an international search report. You can then take that to all of these offices. Rather than have them re-examine everything, they look at [the] Australian search report and say: ‘That makes sense, yes. We’ll just check that procedure X, which is specific to us, is applied. Yes. Here’s your patent. Thank you very much.’
The Committee asked what type of costs were involved for the applicant to have an application processed:
… you should go to a patent attorney to get your patent application drafted because it’s a technical document. You’re specifying a legal monopoly, and you will have exclusivity on the monopoly for up to 20 years. Once you’ve gone to an attorney and paid our fees, you’re probably looking at a cost of between $6,000 and $12,000. IP Australia’s fees, which are $1,000, are a part of that. That’s for the application, for the search and for the renewal of the patent for up to 10 years. Our fees, which really relate to drafting and setting up the monopoly and the invention they’re claiming, are a small part of the total costs.
The Committee inquired how long it takes an application to be processed. IP Australia explained:
The process is that applicants have to request examination. IP Australia manage that process, so we will send out a direction to request examination so that there’s an orderly processing of work. Once the examination report issues, there is a 12-month period for an applicant to place their application in order for acceptance. Following that, the application is advertised, and, if there’s no opposition, it will then proceed to a grant approximately three to six months after acceptance has taken place.
According to the NIA, the existence of the Australian Patent Office as an International Authority has considerable benefits for industry and technology. The examination and support staff of the Australian Patent Office are readily accessible to applicants and their legal advisers. This represents a large skills and knowledge base conveniently available to the business and research sector in Australia.
IP Australia told the Committee that they currently employ over 1 000 highly qualified staff. Three hundred and ninety of those work specifically on patents providing advice and assistance across a diverse range of disciplines:
… one-third have PhDs, and the remaining staff have master degrees and bachelor degrees. They constitute coverage for all the research areas and technologies which can be patented, which are all technologies available. We have anything from chemists, through to metallurgists, through to engineers and any number of other technologies.
In addition to providing International Authority services to Australian inventors, the Australian Patent Office provides International Authority services to developing countries as well as to Brunei Darussalam, New Zealand, the Republic of Korea, Singapore, the United Arab Emirates, and the United States of America. IP Australia told the Committee that it charges $2,200 per international search report requested by these countries and that it received approximately 500 requests during the past year:
… it would be around a million dollars for search work for those countries. For example, we received 209 from the United States last year; 184 from WIPO; 160 from New Zealand; 89 from Singapore; and then smaller numbers from Malaysia, Korea, South Africa and India.
The Committee asked if the number of patent applications has increased in line with population growth in Australia. IP Australia indicated that it has remained steady or declined slightly over the past three years. Asked if this was a reliable indicator of Australia’s level of innovation compared to other countries, IP Australia cautioned that while Australia’s patent applications per capita is relatively low, other factors need to be taken into consideration:
It’s worth remarking that a lot of invention doesn’t necessarily require patents. A lot of science doesn’t lend itself to being patented. Countries that have, for example, particularly heavy engineering or certain pharmaceutical technologies, have a lot more patenting per capita than countries that have more services, which is what Australia tends to have a larger part of the economy being.
IP Australia explained that Australians also file ‘roughly 3½ times as many patents abroad as they file in Australia’, whereas many patents filed in Australia are from overseas clients:
In Australia 90 per cent of patent applications are filed by foreign entities and 10 per cent are filed by domestic applicants. So you’re counting how many patents are applied for by people wanting to sell things in Australia and dividing that with the Australian population.
Overall IP Australia considers Australia’s system supports innovation:
We tend to be in the top 10, top 5, top 3 international rankings. The system’s meant to encourage investment and innovation. We think it does that in that it’s internationally comparable and internationally competitive, the fees are relatively low and the processing times are what the applicants want them to be, because we operate on customer-driven requests.
Almost a quarter of IP Australia's total patent workload comes from its role as an International Authority and the NIA claims that this work is critical to maintain IP Australia's capacity to search and examine patent applications. The NIA considers that continuation of IP Australia's status as an International Authority is therefore necessary to maintain IP Australia's viability as a patent office. The NIA also suggests that as an International Authority, IP Australia can continue to influence the development of the international IP system from a position of operational credibility.
IP Australia re-iterated the important role the Australian Patent Office plays for Australian inventors and enumerated the consequences of the Agreement not being ratified:
The most immediate consequence is that Australian inventors who want to file a PCT application would have to have a search report done by the Korean IP Office, which means they would have to be searched for the technology that the Korean office searches for, and it would have to be done with the Korean system and Korean officers. That would have some impacts on their ability to avail themselves of the PCT itself and their ability to enter the international patents system. Domestically, there will be impacts in terms of whether or not we have examiners able to examine for technology, whether or not we’ll be a viable office and whether we’ll be able to influence the international patent system.
The main changes between the proposed Agreement and the Existing Agreement are that minor details have been moved from treaty articles into annexes to provide greater consistency between the Agreements of all countries acting as International Authorities; and more flexibility for International Authorities to make administrative changes while the Agreement is in force. The annexes of the Agreement provide for:
Annex A—increased transparency by requiring details of developed countries for which an IP Office agrees to act as an International Authority. The Australian Patent Office currently acts for Australia, Brunei Darussalam, New Zealand, Republic of Korea, Singapore, United Arab Emirates, and the United States of America;
Annex B—the respective IP Office to determine, as part of operating as an International Authority, if it will also provide the service of supplementary international patent searches. The Australian Patent Office has currently chosen to not provide supplementary international searches;
Annex C—specifying that patentable subject matter that can be searched and examined will be in accordance with the provisions of Australian patent law;
Annex D—the schedule of fees the respective office charges for providing search and examination services;
Annex E—the possible use of additional patent classification symbols and systems in addition to those used by the International Patent Classification;
Annex F—specifying the language that search and examination activities will be conducted in, which for the Australian Patent Office will be English;
Annex G—the IP Office to choose to provide international type searches under Article 15(5) of the PCT.
Article 2 sets out the basic functions of the Australian Patent Office as an International Authority. The Australian Patent Office shall carry out international search and international preliminary examination in accordance with the PCT, its Regulations, the Administrative Instructions and the proposed Agreement.
Article 2(2) provides that in carrying out international search and international preliminary examination, the Australian Patent Office is to apply and observe all the common rules of international search and international preliminary examination and, in particular, shall be guided by the PCT Search and Preliminary Examination Guidelines.
Article 2(3) provides that the Australian Patent Office shall maintain a quality management system in compliance with the requirements set out in the PCT International Search and Preliminary Examination Guidelines.
Article 2(4) provides that the Australian Patent Office and the International Bureau of WIPO are expected to render mutual assistance in the performance of these procedures.
As the Agreement continues the arrangements under the Existing Agreement, the NIA states that the means of implementing the Agreement are already in place and no additional action is required by either the Commonwealth or the States and Territories. The terms of the Agreement are implemented by the Patents Act 1990 and the associated Regulations.
According to the NIA, there are no contributions payable by Australia under the Agreement nor any anticipated increases in Australia's contribution to WIPO as a result of entry into the Agreement.
Further, the NIA states that the Agreement does not increase costs to industry. The NIA notes however that the absence of this agreement would increase the cost and difficulty for Australian inventors to access and make use of the international patent system, as noted by stakeholders.
The Committee acknowledges the importance of the work done by IP Australia and the Australian Patent Office, for Australian and international clients.
The Committee supports the Agreement and recommends that binding treaty action be taken.
The Committee supports the Agreement between the Government of Australia and the International Bureau of the World Intellectual Property Organization in relation to the functioning of the Australian Patent Office as an International Searching Authority and International Preliminary Examining Authority under the Patent Cooperation Treaty and recommends that binding treaty action be taken.