The Demise of the Innovation Patent.


The Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020 (the Act) is now in force. Inter alia, the Act amends the Patents Act 1990. As a result, the innovation patent system will be phased out.

IP Australia will no longer permit the filing of new innovation patent applications from 26 August 2021. Existing innovation patents with a filing date on or before 25 August 2021 will continue in force until they expire. A divisional application for an innovation patent can be filed after 25 August 2021 if the parent application was filed on or before 25 August 2021. Likewise, a standard patent application with a filing date on or before 25 August 2021 can be converted to an innovation patent application after 25 August 2021.

The reasons for phasing out the system have been provided by IP Australia in a fact sheet. Apparently, innovation patents harm small business innovation for the following reasons:

  • innovation patents are used by large firms as a strategic tool to stifle competition;
  • low standards for innovation patents inhibit genuine innovation and competition; and
  • innovation patents put Australian innovators at risk in overseas markets.

The author believes that these are disingenuous. Innovation patents are a useful tool for small businesses to maintain rights to IP that otherwise does not qualify for a standard patent. It can be expensive for small businesses to obtain a standard patent in Australia. The innovation patent is significantly cheaper because it does not involve the often extensive examination procedure that IP Australia applies to standard patent applications. This is exacerbated by IP Australia recently raising its examination standards. The author is of the view that the demise of the innovation patent will remove access to local IP protection by small businesses, exactly the group of people that IP Australia claims to be supporting.

In concession, IP Australia has launched “new and tailored SME support services”, as set out in the fact sheet. These measures have a nice ring to them but they remain a poor substitute for the IP rights provided by an innovation patent. Regardless of the “education” and support provided by IP Australia, applicants are still required to clear the bar to patent protection by the raised examination standards.

Innovators should consider filing applications for innovation patents before 25 August 2021. More information regarding innovation patents is available here.