Challenges to patent rights

9.2 Opportunities to object to the grant of patent rights exist at each stage of the patenting process—prior to acceptance of a standard patent application, after the Commissioner of Patents has accepted an application, and after a patent has been sealed. The mechanisms for challenging patent rights are discussed below.^[1]

Intervention in the examination process

9.3 Under s 27 of the Patents Act 1990 (Cth) (Patents Act), any person may intervene in the examination of a standard patent application. A person may file a notice (commonly referred to as a ‘s 27 notice’) with the Patent Office asserting that the invention claimed in the patent application is not novel or does not involve an inventive step. The notice may be filed any time after publication, but before acceptance, of a complete application.^[2] It must contain reasons for the assertion that the claimed invention is not patentable and attach any documentary evidence on which the assertion is based.^[3]

9.4 Upon receipt of such a notice, the Commissioner of Patents must notify the applicant and make available copies of documents provided in support of the notice. In practice, documents provided to the Patent Office pursuant to a s 27 notice are included in the prior art information used by the examiner assessing the application, and are also open to public inspection.^[4]

9.5 A patent examiner is not, however, required to raise an objection to an application based on information provided under a s 27 notice. Once the s 27 notice has been filed, the notifier does not take any further part in the prosecution of the patent application and will not be aware of the impact of the notice unless and until the application has been accepted.^[5]

9.6 A report by the Advisory Council on Intellectual Property (ACIP)^[6] on the patenting of business systems (ACIP Business Systems Report) commented on the ‘potentially great benefit’ of the general public and industry experts providing prior art to patent examiners under a s 27 notice.^[7] ACIP recommended that IP Australia should raise public awareness of the ability to submit relevant citations for specific patent applications pursuant to s 27.^[8] Similarly, Professor James Lahore has commented that a s 27 notice ‘has the advantage of cheapness and potential anonymity, and best suits circumstances of clear prior publication’.^[9] He notes, however, that ‘[t]here is the disadvantage of telegraphed intentions without an opportunity to stay involved’.^[10]

Opposition

9.7 The three primary mechanisms for challenging a patent after acceptance of the patent application are opposition, re-examination and revocation.

9.8 Any person may initiate proceedings to oppose the grant of a standard patent within three months of publication of a notice of its acceptance by the Commissioner of Patents.^[11] Opposition to a standard patent thus occurs before the patent is sealed.

9.9 Currently, the grounds upon which an application for a standard patent may be opposed are limited to the following:^[12]

• the applicant is not the person who is entitled to the grant of a patent, or is only entitled in conjunction with some other person;^[13]

• the invention is not a manner of manufacture, is not novel or does not involve an inventive step when compared to the prior art;

• the patent specification does not comply with the requirements of s 40(2) or s 40(3) of the Patents Act relating to sufficiency and fair basis; or

• the invention relates to human beings or to biological processes for their generation.

9.10 An objection raised by an opponent, and the prior art cited in support of an objection, may be similar or in addition to that already overcome by an applicant during examination of the patent application by the Patent Office.^[14] Opposition hearings are the responsibility of the Commissioner of Patents and are heard and determined by senior patent examiners within the Patent Office.

9.11 There are several possible outcomes of opposition proceedings. The Commissioner may dismiss an opposition on procedural grounds, either in whole or part;^[15] the proceedings may result in the amendment of one or more of the patent claims in order to rectify deficiencies in the application; or the opposition may be successful, in which case the Commissioner may refuse to grant a patent.^[16] The most common outcome of opposition proceedings is that the scope of the opposed patent claims is restricted. The patent holder or the opponent may appeal decisions of the Commissioner to the Federal Court.^[17]

9.12 In practice, only a very small proportion of accepted applications—approximately 1.5%—are opposed.^[18] Statistics on the number of oppositions filed in relation to gene patents are not readily available, but data for the broader category of biotechnology patents suggest that the number of oppositions is also very small.^[19] According to data provided by IP Australia, in the five years from 1997–98 to 2001–02, there were only 14 substantive decisions made on biotechnology oppositions (an average of less than three per year), although 12 of these were successful.^[20]

Review of the opposition process in Australia

9.13 Two reports have reviewed the system for opposing patents under Australian law—a 1999 ACIP report on the enforcement of intellectual property rights (ACIP Report)^[21] and the 2000 report of the Intellectual Property and Competition Review Committee (IPCRC Report).^[22] The reports addressed two principal concerns about the current opposition process: whether oppositions should be available prior to the grant of a patent (as is currently the case) or only post-grant; and who should have responsibility for hearing opposition proceedings.

9.14 ACIP considered perceived deficiencies in the current system of pre-grant opposition, and commented on the fact that third parties may use opposition proceedings to delay the grant of a patent.^[23] However, consultations conducted by ACIP indicated that industry did not generally support replacing pre-grant opposition with post-grant opposition. Further, the IPCRC Report indicated that there might be concerns about adopting a post-grant opposition procedure because such a review might be regarded as an unconstitutional exercise of judicial power by a non-judicial body (that is, by IP Australia).^[24]

9.15 Both reports suggested that there was scope to improve the procedures for pre-grant opposition. The ACIP Report did not make a specific recommendation on this issue but encouraged IP Australia and the Institute of Patent and Trade Mark Attorneys of Australia to review the current procedures.^[25] The IPCRC Report indicated that hearings officers in opposition matters should continue to comprise senior examination officers at the Patent Office. While a specialist hearing section—comparable to those in the United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO)—did not need to be established, the IPCRC Report recommended that ‘IP Australia take further measures to improve perceptions of the hearings process [for oppositions] being independent of, and more generally fair and equitable to, all parties’.^[26] IP Australia has formed an Opposition Hearings and Legislation section in response to the issues raised in the IPCRC Report.^[27]

Re-examination

9.16 Re-examination provides another mechanism for challenging the validity of a patent (or, in some cases, an accepted application for a standard patent).^[28]

9.17 The only relevant issues in re-examination are whether the invention claimed in the patent or patent application is novel or involves an inventive step.^[29] Re-examination may be conducted at the discretion of the Commissioner, upon the request of a patent holder or any other person, or at the direction of a prescribed court in connection with proceedings disputing the validity of a patent.^[30]

9.18 Re-examination is conducted ex parte—that is, in the presence of one party, but not the other. The Commissioner of Patents is responsible for re-examination. However, in practice, re-examination is usually undertaken by patent examiners to whom the Commissioner has delegated the power to examine patent applications.^[31]

9.19 As a result of re-examination, one or more claims in a patent may be amended as directed by the Commissioner.^[32] The Commissioner also has power to refuse to grant a patent application, or to revoke an issued patent (either in whole or part) that has been the subject of an adverse re-examination report.^[33]

9.20 A patent holder may appeal decisions of the Commissioner on re-examination to the Federal Court.^[34] Third parties, however, have no right to appeal against decisions of the Commissioner on re-examination. If, following re-examination, the Commissioner finds that a patent (or an application for a standard patent) is valid and a third party still wishes to challenge the enforceability of the patent, the only available course of action is to apply for revocation under s 138 of the Patents Act.^[35]

9.21 Prior to amendments to the Patents Act in 2001,^[36] the re-examination provisions had been invoked only on a few occasions and it had been suggested that other mechanisms for challenging patents were more attractive.^[37] IP Australia informed the ALRC that re-examination is now more common as a result of amendments to s 45(3), requiring an applicant to disclose to the Patent Office the results of searches carried out by or on behalf of foreign patent offices in respect of an invention claimed in an Australian patent application, or in a corresponding patent application filed overseas. IP Australia indicated that the increase in the number of re-examinations is largely a result of this change in procedure, rather than changes in the behaviour of third parties who wish to challenge patent rights.

Revocation

9.22 A patent may be revoked after it has been granted. Typically, an application for revocation of a patent is filed as a counter-claim to a claim of infringement.^[38] However, a person may seek revocation of a patent independently of infringement proceedings.^[39]

9.23 The grounds upon which an application for revocation may be made are broader than those for opposition or re-examination. The grounds include that:^[40]

• the patent holder is neither the inventor, nor has a legal right to the invention and is therefore not entitled to the patent;

• the invention is not a ‘patentable invention’ as defined in s 18;^[41]

• the patent holder has contravened a condition in the patent;

• the patent was obtained by fraud, false suggestion or misrepresentation; or

• the patent specification does not comply with s 40(2) or s 40(3) relating to sufficiency and fair basis.

Other jurisdictions

9.24 Patent laws in some other jurisdictions, such as Canada and the United States, provide more limited mechanisms for challenging patent rights both before and after a patent has been granted.^[42] However, recent reviews in these countries have proposed reforms, with a view to promoting mechanisms for challenging patent rights that are cheaper and less complicated than court proceedings.

9.25 In Canada, two reports published in 2002 recommended the introduction of an opposition procedure to allow challenges within a limited period following the grant of a patent.^[43] Similarly, in the United States, the Federal Trade Commission and the National Research Council have recommended improvements to the procedures for post-grant review of patents, which would allow third parties to challenge the validity of a patent on broader grounds than are currently available under United States law.^[44] The USPTO has also contemplated improving the available grounds for post-grant review of patents as part of its 21^st Century Strategic Plan.^[45]

Submissions and consultations

9.26 The ALRC sought comments about whether existing mechanisms for challenging gene patents were adequate, or whether additional or alternative mechanisms might be required. Submissions and consultations did not support the introduction of new mechanisms to permit challenges specifically to gene patent applications or granted gene patents.^[46] A number of submissions commented that the current mechanisms for challenging patents are generally satisfactory.^[47] Dr Amanda McBratney and others considered that current procedures strike the right balance between giving third parties an opportunity to test the validity of a patent or patent application and not unduly delaying the grant of patent rights.^[48] The peak body of the Australian biotechnology industry, AusBiotech Ltd, indicated that its members generally considered that the Australian procedures for challenging patents were better than in other jurisdictions, such as Europe or the United States.^[49]

9.27 However, many submissions indicated that, while the mechanisms for challenging patent rights might be effective if invoked, the financial cost of a patent challenge is often prohibitive, particularly for smaller organisations and public sector institutions.^[50]

9.28 A small number of submissions proposed specific reforms to the current mechanisms for challenging patent rights.^[51] The Australian Centre for Intellectual Property in Agriculture (ACIPA) suggested that third party participation in patent challenges should be facilitated, for example by expanding the grounds on which a patent may be re-examined and allowing third party appeals from adverse re-examination decisions.^[52] ACIPA and the Centre for Law and Genetics also encouraged the ALRC to consider whether changes recommended to the procedures for post-grant review of United States patents should be implemented in Australia.^[53]

ALRC’s views

9.29 The ALRC’s view is that no changes are currently required to the mechanisms for challenging gene patent applications or granted gene patents. The ALRC agrees with submissions that suggested that genetic materials and technologies do not give rise to any special needs in this regard.

9.30 No evidence was provided to the Inquiry that the opposition, re-examination or revocation procedures set out in the Patents Act are inadequate avenues for challenging gene patent rights. While a few submissions considered that proposed changes to the mechanisms for challenging patents under United States law might be implemented in Australia, the ALRC does not support this approach. The avenues for challenging Australian patents are already more extensive than those available under United States law. Furthermore, differences between jurisdictions—both as to the substance and administration of patent law—mean that procedures for challenging patent rights are not automatically transferable from one system to the other.^[54]

9.31 Third parties may intervene in each stage of the patent process and, in the ALRC’s view, no additional avenues for intervention are currently required. However, in Chapter 6 the ALRC recommends that ‘usefulness’ should be considered by Australian patent examiners in examining patent applications and, consequently, should be a ground upon which an accepted patent application may be opposed (see Recommendation 6–3).

9.32 Some submissions expressed concern about the cost involved in challenging patent rights. The large investment of time and resources required to challenge a gene patent might result in patents of questionable validity not being challenged. In the ALRC’s view, this is not necessarily a failure of the mechanisms currently available to challenge patents, but it does raise questions about who should initiate such challenges. As discussed later in this chapter, litigation insurance may provide a person with the financial resources necessary to conduct patent litigation. In addition, Chapter 19 considers ways in which health departments and other organisations may participate more actively in evaluating and, if necessary, challenging patents that may have an adverse impact on human health or genetic research. As discussed in that chapter, intervention in patent processes by public sector agencies can achieve public policy outcomes, as demonstrated by the revocation of Myriad Genetics’ European patent on the BRCA1 gene as a result of opposition proceedings filed by a group of healthcare organisations.