– Parliament of Australia

Labor Senators Minority Report

Summary of Recommendations

Labor Senators recommend that the Government develop a formal process for consulting widely across the intellectual property and research sectors to develop any proposed amendments to the Bill.

Labor Senators condemn the Government’s partial and inadequate response to reviews such as the Ergas Committee and staggered approach to intellectual property reform as damaging Australia’s intellectual property infrastructure by creating uncertainty for the intellectual property and research sectors.

Labor Senators recommend that the Senate conduct a review the economic impact of proposed reforms to Australia’s patent system, prior to the passage of the Bill.

Labor Senators recommend that the Bill be amended in consultation with the intellectual property and research sectors to better clarify the realistic scope of information that must be disclosed during the patent application process.

Labor Senators recommend that the Bill be amended to require the Minister to conduct and have regard to the findings of a review of international movements toward the adoption of grace period provisions prior to the introduction of regulations introducing such a framework in Australia.

1.1 Concerns raised about the Committee process

1.2 Notification and contact with interested parties

Labor Senators note concerns raised by the Australian Federation of Intellectual Property Attorneys (FICPI) Australia about the adequacy of consultation with interested parties to the Bill, and the inadequacy of the consultation period in respect to the time required to consider and prepare detailed submissions on this complex set of reforms.

Labor Senators also note the broad range of concerns raised by organisations such as the Australian Law Council and the Institute of Patent and Trademark Attorneys, and recognise that the continuing existence of such concerns raises serious questions about the apparent lack of consultation and consensus forming underlying the development of these reforms.

Labor Senators recommend that the Government develop a formal process for consulting widely across the intellectual property and research sectors to develop any proposed amendments to the Bill.

2.1 Concerns raised about the Bill

2.2 Partial reform

While Labor Senators agree with the broad principles underlying the Bill, we note that the proposed reforms only address some of the fundamental issues identified by previous inquiries into Australia’s intellectual property framework.

The Government indicated in the context of the announcement of the Backing Australia’s Ability statement in January this year that it “will also respond in a timely manner to the remaining recommendations of the reviews”.[61]

Labor Senators agree with the views raised in submissions to the Committee that if further reforms are to be proposed, that the reforms would be more appropriately dealt with by the Parliament in whole, to better gauge the impact and potential effect of such heavily integrated reforms.

Labor Senators believe that the uncertainty created by the promise of further change only serves to inhibit the growth and development of Australia’s intellectual property sector, by discouraging investment and institutional expansion.

2.3 The economic impact of proposed reforms

Labor Senators are concerned that while the Committee noted that IP Australia did not respond directly to concerns raised about the difficulties faced by large research organisations in complying with the proposed disclosure provisions, these issues are central in the broader debate about intellectual property reform, and the development of an appropriate intellectual property framework in Australia

Labor Senators note that both the Australian Law Council and the Institute of Patent and Trademark Attorneys raised concerns about the potential burden on these sectors of the reforms proposed in the Bill, and the apparent lack of any legitimate attempt to gauge the potential impact of the Bill.

The Explanatory Memorandum to the Bill indicates that the proposed reforms will have no economic impact, yet clearly many hold the view that this is not the case.

The question of placing economic barriers to the growth of Australian innovation seems absurd, given the attention paid to the value of innovation to the economy in recent years.

The question of the impact of reforms on Australia’s domestic intellectual property infrastructure must not be ignored, particularly when concerns about the reforms are being voiced by significant numbers of the peak professional operators in the field of intellectual property.

Labor Senators recommend that the Senate conduct a review the economic impact of proposed reforms to Australia’s patent system, prior to the passage of the Bill.

2.4 Clarification of some wording of the Bill

In response to concerns about the lack of clarity in some wording of the Bill[62], IP Australia contended that under the current regime, where the Act “may require” applicants to inform the Commissioner of Patents about searches “in respect of a corresponding application” the wording had not presented difficulties to date.

This raises the question of the degree to which the requirement has been applied in the past, and under what circumstances, and again raises questions about the financial impact of these reforms, in this case the issue of what the additional cost of requiring applicants to provide such information in every instance may be.

The uncertainty created by this reform further emphasises the concerns raised in submissions to the Committee about the potential cost to industry and the research sector of these reforms.

2.5 Adoption of Period of Grace provisions

Several submissions[63] to the Committee noted the dangers of Australia adopting a “period of grace” regime, deigned to protect a patent application against invalidation by self publication in certain circumstances and prior public use, in advance of major trading partners, notably the European Union.

As noted in previous submissions, the risk with Australia adopting a grace period in advance of other jurisdictions is that while publication may not injure patentability in jurisdictions with grace periods, it may destroy it in those without.[64]

The Government announced during the launch of the Backing Australia’s Ability strategy that it would introduce period of grace provisions into Australia’s intellectual property framework.[65]

While Labor Senators recognise the international movement towards a uniform grace period framework, we also recognise the danger to Australian innovators raised by the early adoption of such a regime.

Senator Shane Murphy
Senator for Tasmania

Senator George Campbell
Senator for NSW

Australian Democrats – Dissenting Report

1. Introduction

1.1 The Australian Democrats do not support the Chair’s recommendation that the Senate pass the Bill. In our view there are a number of defects with the Bill, which require amendment.

1.2 The Australian Democrats are committed to deepening an innovation culture in Australia. We recognize that development of human and intellectual capital is basic to the success of an innovation society in a global knowledge economy.

1.3 Accordingly we are supportive of developing a robust intellectual property system that provides incentives for investment in developing intellectual property and enables rapid diffusion of intellectual property while balancing the needs of the community and consumers.

1.4 While broadly supportive of the intent to strengthen Australia’s intellectual property system, the Democrats are concerned that the Government’s proposed amendments to the Patents Act 1990 which will potentially increase costs for applicants, create uncertainty in the patent process and reduce investment in innovation. We do not believe this is a desirable outcome and is at odds with the Government’s professed concern to enhance innovation.

1.5 As the Institute of Patent and Trade Mark Attorneys (IPTA) pointed out in its submission “the effect of these amendments is extremely broad and potentially affects not all users of the patent system but also persons engaging in commercial activity in Australia”.[66]

2. The Bill

2.1 The Bill seeks to implement changes to Australia’s intellectual property system as foreshadowed in the Government’s innovation plan – Backing Australia’s Ability.

2.1 It seeks to make Australian patents more certain by raising the threshold for obtaining a patent and aligning the novelty and inventive step requirements more closely with international standards.

2.2 The Bill amends the Patents Act 1990 in three main ways. First, it expands the prior art base by removing geographic constraints and permitting combinations of different pieces of information. Secondly, it introduces a ‘balance of probabilities test’ to replace the requirement that applications be given the benefit of the doubt and finally, it requires an applicant for a standard patent or an innovation patent owner to provide the commissioner the results of any searches of the prior art base.

2.3 As the Chair’s report notes (1.2) the committee was asked to consider the intent, clarity and legal consequences of the proposed amendments. It is telling that all the submittees had substantial familiarity with various aspects of Intellectual Property and all highlighted defects in the proposed legislation. As the Chair’s report correctly states

significant concerns were expressed about lack of clarity and other defects in the wording of the Bill, the piecemeal adoption of the recommendations of the reports of the Intellectual Property and Competition Review Committee (IPCRC) and the Australian Council on industrial Property (ACIP), and the failure of the amendments proposed to fully reflect the reasoning of those review recommendations (1.15).

It is disappointing then, that these significant concerns remain unaddressed.

3. Expansion of Prior Art Base

3.1 A number of submittees pointed out that removing the geographical restriction on the relevant knowledge creates interpretive difficulties.[67]

3.2 The Democrats accept the merit of these arguments and note in particular the recommendation in the Ergas report that the ‘common general knowledge’ should be limited to that ‘anywhere in the world which a person skilled in the art could have reasonably expected to find, understand and regard as relevant’[68].

3.3 This recommendation is supported by IPTA and the Democrats believe an amendment to give affect to the Ergas recommendation is warranted.

3.4 The LCA and IPTA also raised concerns about allowing the combination of two or more documents or other pieces of the prior art to assess whether an invention is novel. They note that the amendment as drafted does not accurately reflect the Ergas recommendation.[69]

3.5 The Democrats are most concerned that the amendment has the potential to increase costs as pointed out by IPTA.[70] This may eventuate with the conjunction of the increase in the threshold test by expanding the permissible combination of information and the dropping of the current requirement that combination is only permissible if the relevant person could have been reasonably expected to ascertain, understand and regard the information as relevant. While noting the response of IP Australia the Democrats will seek further advice but do foreshadow the possible need for amendment.

4. Searches For Prior Art

4.1 The Democrats are concerned that the increased requirement on applicants to discover all searches may have cost implications for universities and research institutes.

4.2 In their submission, the Australian Academy of Science argued

It will be difficult in practice for an academic research entity to organise and fund search activity in a way that will satisfy this provision. ... It may put an unfair burden on applicants to assume part of the job of patent examiners and jeopardise foundation intellectual property generated in the public sector.[71]

4.3 The LCA noted that the Ergas committee recommended that an applicant must make “reasonable inquiry” within its own organisation. They note that not including this element of the Ergas recommendation;

means that there is an absolute obligation for all knowledge of an organisation, however large and wherever located and whether known to the inventor or not to be disclosed even if such knowledge could not be found by reasonable inquiry.[72]

4.4 As the Chair’s report noted (1.51), the additional burdens call into question the claim in the Financial Impact Statement in the Explanatory Memorandum to the Bill that “No additional cost to the Government or to any other person is expected to directly result from these amendments.”

4.5 The Democrats are satisfied that this provision of the Bill may place an unreasonable burden on applicants and increase costs and uncertainty. This is manifestly at odds with the public interest in enhancing our intellectual property system. Rather than simply monitor the new provisions as argued by the Chair’s report (1.52), the Democrats will seek to amend the legislation to provide a more pragmatic and reasonable approach.

5. Additional concerns

5.1 As the Chair’s report notes concerns were also raised about the lack of clarity in the scope of searches, changes to the innovation patent whereby universal prior use will by an unreasonable threshold for SMEs (1.57), patent infringements and prior use defence and the foreshadowed introduction of a grace period.

5.2 The Democrats share some of the concerns of submittees on these issues and may seek to amend the Bill to remedy some of the concerns.

5.3 The Democrats note with much interest the submission of Dr Ian Ferguson who along with the Academy of Science provided the committee with a knowledge producer’s perspective.

5.4 Dr Ferguson argued for serious consideration of the US’s continuation-in-part patent system as it better reflects the dynamic nature of R&D and innovation.[73] The Democrats are not convinced by IP Australia’s negative response to this suggestion[74] and recommend that this idea be explored in greater detail with a view to possible future amendment to Australia’s IP system.

6. Process

6.1 The Democrats note the concern raised by a number of submittees that a number of the elements in the Bill only partially reflect elements of the final report of the Intellectual Property And Competition Review Committee (IPCRC).[75] Moreover, the Democrats are concerned that this piecemeal approach is exacerbated by the Government’s failure to table its response to the final report and the ACIP Enforcement Report of March 1999.

6.2 We do not accept that just because the Government stated in Backing Australia’s Ability that it intended to fast-track the changes to the patent system that this justifies the absence of a coherent and well considered IP framework.

6.3 By way of conclusion the Democrats wish to express our concern with the absence of a public hearing into these matters. All non-government submissions raised substantial concerns that warranted further elaboration and public discussion.

Senator Aden Ridgeway

Appendix 1 – List of Submissions

Submittor	Submission Number
The Australian Federation of Intellectual Property Attorneys (FICPI Australia), VIC	1
Law Council of Australia, ACT	2
The Institute of Patent and Trade Mark Attorneys of Australia (IPTA), Vic	3
Australian Academy of Science, ACT	4
Flinders University, Ferguson, Mr Ian, SA	5
IP Australia, ACT	6
IP Australia, ACT	6A

Navigation: Contents