The general grace period

14.60 As discussed in Chapter 6, a patent will only be granted for an invention that is ‘novel’ and involves an ‘inventive step’.^[87] The novelty of each claim in a patent application is assessed against the ‘prior art base’ that comprises publicly available ‘prior art information’ as it existed before the priority date of the relevant patent claim.^[88] Whether an invention involves an inventive step is also assessed against the prior art base at that date.

14.61 An invention may be deprived of novelty by prior use, information disclosed in oral communications or information contained in documents. Similarly, prior use or publicly available information may prejudice claims that an invention involves an inventive or innovative step.^[89]

14.62 The Patents Act 1990 (Cth)provides that for the purposes of deciding whether an invention is novel or involves an inventive or innovative step certain uses or information must be disregarded (disclosures of this nature are referred to below as ‘non-prejudicial disclosure’).^[90]

14.63 Non-prejudicial disclosure includes any information made publicly available, through any publication or use of the invention, in circumstances prescribed by regulation. The circumstances prescribed are set out in the Patents Regulations 1991 (Cth) (Patents Regulations) and include publication or use of the invention:

• by the showing or use of the invention at a recognised exhibition, or the publication of the invention during an exhibition where the invention was shown or used;^[91]

• by the publication of the invention in a paper written by the inventor and read before a learned society or published by a learned society;^[92] or

• by the working in public of the invention within a period of 12 months before the priority date for the purposes of reasonable trial.^[93]

14.64 In each of these cases, the protection only applies if a patent application is made for the invention within a prescribed period. The prescribed periods range from between six or 12 months after the publication or public use of the invention, depending on the circumstances.^[94] In order to comply with these requirements and protect patent rights, it is usual to lodge a provisional patent application to secure a priority date, after which disclosure becomes possible.^[95]

14.65 The above categories of non-prejudicial disclosure are recognised in many other jurisdictions. For example, national laws dealing with disclosure at official or international exhibitions are obligatory for all member States of the Paris Convention for the Protection of Industrial Property 1883.^[96] The other categories of non-prejudicial disclosure mentioned above are harmonised in the law of member States of the European Patent Convention.^[97]

14.66 Australia has had general grace period provisions since 2002.^[98] These apply to any publication or use by, or with the consent of, the prospective patent holder within 12 months of the filing date of the complete patent application provided it is filed within 12 months after the information was made publicly available.^[99] These more lenient requirements apply only to disclosures made on or after 1 April 2002.^[100] These provisions are referred to in this Report as the ‘grace period provisions’.

14.67 While some other countries have similar grace period provisions,^[101] most European countries do not.^[102] Whether such provisions should be introduced into European patent law has been the subject of extensive debate.^[103]

14.68 The grace period provisions followed recommendations of the Intellectual Property and Competition Review Committee (IPCRC).^[104] However, the IPCRC also stated that:

the introduction of a grace period in Australia should be coordinated with an introduction in Europe. However, if it appears that such moves in Europe will take more than five years from October 2000, then Australia should seriously consider proceeding before its European counterparts.^[105]

14.69 While the primary reason for introducing the grace period was directed to problems that inventors face when they wish to publish their inventions immediately following the filing of a provisional application,^[106] the potential benefits of grace periods are said to include encouraging the sharing of research results between inventors and allowing researchers and academics to publish results in journals and peer reviewed literature without putting at risk any patentable subject matter that may be disclosed.^[107]

14.70 However, disclosure permitted by the grace period provisions may destroy the novelty of the invention in countries that do not have equivalent provisions—notably in Europe. Associate Professor Ann Monotti and Professor Sam Ricketson argue that:

The new grace period will do nothing to promote prompt dissemination of university research while significant markets operate within countries that apply the absolute novelty test. It will continue to be important to delay public disclosure of inventions until after a priority date is secured.^[108]

14.71 On the other hand, Monotti and Ricketson conclude that the grace period provisions provide a ‘safety net’ for those who make inadvertent disclosures and that the grace period must be seen as a ‘positive development’ from the point of view of academics and universities.^[109]

The Australia–United States Free Trade Agreement

14.72 In May 2004, Australia and the United States concluded negotiations for an Australia–United States Free Trade Agreement (AUSFTA).^[110] The AUSFTA includes a requirement that each party provides for a grace period. Specifically, article 17.9.9 provides:

Each Party shall disregard information contained in public disclosures used to determine if an invention is novel or has an inventive step if the public disclosure (a) was made or authorised by, or derived from, the patent applicant and (b) occurs within 12 months prior to the date of filing of the application in the territory of the Party.^[111]

14.73 Article 17.9.9 of the AUSFTA reflects current Australian law. It also acts as a constraint on reform and would preclude shortening the current length of the grace period, or removing it altogether.

Submissions and consultations

14.74 In response to IP 27, a number of submissions indicated that the grace period provisions do not significantly encourage early publication,^[112] mainly because not all countries recognise grace periods.^[113]

14.75 Dr Amanda McBratney and others submitted that it is ‘highly doubtful’ that the grace period works to encourage scientific disclosure or overcome secrecy because most scientists will want to patent not just in Australia or the United States, but in Europe as well.^[114]

14.76 The motivations of academic researchers were also cited as a reason why the grace period was not seen as important in encouraging scientific publication. McBratney and others stated that, based on surveys of university research practices, for researchers ‘publication of [research] results is the dominant driving paradigm. Issues of secrecy, commercialisation and patentability are a distant concern’.^[115]

14.77 Some negative effects of the grace period provisions were identified. For example, GlaxoSmithKline stated that, from a pharmaceutical industry perspective, grace periods ‘increase the uncertainty around decisions to invest without encouraging earlier publication of the invention’.^[116]

14.78 Some submissions also expressed concerns that researchers may not be aware or understand the implications of the grace period provisions.^[117] In contrast, AusBiotech Ltd expressed the view that scientists in Australia have become much more aware of the importance of patent protection over the past 10 years, so the need to rely on the grace period is relatively rare.^[118]

14.79 DP 68 proposed that:

• the responsible Minister should request the Advisory Council on Intellectual Property (ACIP) to review the grace periodprovisions in the Patents Regulations to ascertain whether these provisions are having an adverse impact on the commercialisation of Australian research in Australia or overseas;^[119] and

• universities and other publicly funded research organisations should ensure that their researchers are fully informed about the operation of the grace period provisions in the Patents Regulations, particularly in relation to the effect of publication before filing a provisional patent application, and the effect of publication on the patentability of their inventions in countries that do not have equivalent provisions.^[120]

14.80 Submissions strongly supported a review of the grace period provisions.^[121] The Department of Industry, Tourism and Resources (DITR) pointed out that the successful operation of the grace period requires it to be implemented at a global level, which has not yet occurred. It suggested that a review of the grace period provisions in Australia was important to discover whether the provisions are adversely affecting patenting of Australian inventions in jurisdictions that do not allow grace periods.^[122]

14.81 IP Australia noted that the Australian Government made a commitment to review the grace period two years after its commencement in April 2002. It noted that the impact of the grace period provisions on the commercialisation of Australian research would be one of the main issues investigated.^[123] IP Australia also commented that the Government has not yet determined who is best placed to conduct a review: ACIP, IP Australia or the Intellectual Property Research Institute of Australia.^[124]

14.82 Submissions also supported measures to ensure researchers are fully informed about the operation of the grace period provisions.^[125]

14.83 However, the Queensland Government suggested that some universities and government departments prefer not to educate researchers about the grace period provisions, as using the provisions limits the jurisdictions in which a patent application can be filed. It suggested the provisions were used only to address inadvertent publication, and that in these cases, the provisions were beneficial in avoiding invalidation of the potential patent.^[126]

ALRC’s views

14.84 The Australian Government introduced the general 12 month grace period despite the IPCRC’s recommendation that Australia should try to coordinate any changes with Europe, where the issue remains alive and unresolved.

14.85 One view is that it may be too early to assess the effect of the introduction of the grace period provisions in Australia.^[127] However, submissions highlighted the dangers that reliance on the grace period may have for patentability in other jurisdictions.

14.86 Given the limited progress towards introducing equivalent provisions in Europe,^[128] the ALRC recommends that the responsible Minister should initiate a review of the grace periodprovisions to examine whether they are well understood by the research community; and how they have affected the commercialisation of Australian research in Australia or overseas (Recommendation 14–3). The ALRC recognises that there are a number of bodies that could undertake this review, and has not made a recommendation as to which one should undertake it.

14.87 The review should cover the operation of the grace period in Australia since its inception. Given the terms of the AUSFTA, it is unlikely that the grace period will be revoked, and the review should therefore not focus on whether the grace period ought to be retained. Rather, the review should examine any adverse impacts of the grace period and ways to address them. In particular, the review should investigate awareness and understanding of the novelty provisions of the Patents Act by researchers to ascertain whether it is operating as intended.

14.88 The IPCRC stated that, when a grace period is introduced, IP Australia should actively inform inventors ‘of the risks that disclosure may incur to patentability in jurisdictions without a grace period’.^[129] Concerns about inventors misunderstanding the grace period were raised during debate over the introduction of the grace period provisions.^[130] Monotti has concluded that ‘it is critical that there be adequate education and publicity campaigns about the effect of these changes so that university (and other) inventors are not misled into believing that they can now publish before they file an Australian patent application’.^[131]

14.89 The ALRC recommends that universities and other publicly funded research organisations should ensure that their researchers are fully informed about the operation of the grace period provisions, particularly in relation to the effect of publication before filing a provisional patent application, and the effect of publication on the patentability of their inventions in countries that do not have equivalent provisions.