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At an IP Academics’ conference in early February, I remember Professor Di Nicol asking, rhetorically, ‘where has all the patent reform gone?’. Di pointed out that we’d had any number of ACIP Reports, ALRC Reports (like that on Gene Patenting), and IP Australia Discussion Papers, all with no actual legislation resulting.

No more, it seems.

No doubt many are already aware of the Intellectual Property Laws Amendment (Raising the Bar) Bill. An exposure draft for this Bill was released by IP Australia was released on 3 March, with comments due by Monday next week (4 April). The provisions of the Bill have been discussed at some length elsewhere, too, including some very interesting, thorough discussion of Schedule 1 on the Patentology blog.

I have a few thoughts though, on things that haven’t been discussed much.

In summary, the Bill has 6 Schedules, and mostly deals with patent, although it has some important trade mark bits too.

1. Schedule 1 is meant to be about ‘raising the quality of granted patents’, but, in short, it’s about standards for granting a valid patent. It covers everything from changing the way prior art is considered in assessing whether a patent has an inventive step, making the requirement of usefulness a bit more real by requiring a ‘specific, substantial, and credible use’ for the invention; to the effective abolition of ‘fair basis’ and its replacement with a concept of ‘support’ drawn from European law.
2. Schedule 2 proposes a new research exemption in patent, something that has been discussed for years now and is long overdue, to be honest.
3. Schedule 3 is meant to be about ‘reducing delays in resolution of patent and trade mark applications’, which seems to be mostly about finding ways to speed up patent and trade mark oppositions, I’m not entirely convinced the proposals will work, not least because I can’t see anything there that really deals with extensions of time in opposition proceedings, that can really extend the time of an opposition; in any event, mostly the proposed changes create a framework within which more detailed regulations will be made. It is hard, therefore, to predict the ultimate outcome of these reforms. Perhaps more important (and more likely effective) are the proposed amendments to divisional patent applications. ‘Divisionals’ happen (in general) when a patent application is ‘split’ into more than one application. The basic idea is fine, of course, but it can be used in all kinds of interesting strategic ways, including, at the moment, splitting an application off into a divisional when the main application is opposed by someone else – thus getting a patent through faster without the opposition applying to it. Under the proposed changes, applicants will only be able to file divisionals up to the date by which oppositions have to be filed. So, at least if an opposition is filed at the very end of the opposition period, it won’t be possible to split off a divisional patent to avoid the impact of a patent opposition. There are a few other strategic moves that are discussed in the EM which will be precluded by this change. The change seems fair to me.
4. Schedule 4 is about ‘assisting the operation of the IP profession’ – and deal with patent attorney privilege (like legal privilege, but for patent and TM attorneys) as well as some disciplinary stuff and material about registering attorney firms. Potentially interesting stuff in there that tries to define what counts as giving ‘intellectual property advice’ – raises interesting questions about what bits of what attorneys do don’t count as giving legal advice…
5. Schedule 5 is about enforcement. It makes some substantial changes to enforcement at the border, mostly by introducing a requirement that people whose goods are seized on the instance of a trade mark or copyright owner will now have to positively claim their goods (rather than having them returned as a matter of course if legal proceedings aren’t commenced within 10 days by the IP owner). We also have a full re-write of the TM criminal offences (creating two levels, summary and indictable, like in the Copyright Act), and the addition of additional damages for ‘flagrancy’ in civil proceedings.
6. Schedule 6 is (allegedly) about “Simplifying the IP system”. It covers a miscellaneous collection of stuff, including (a) giving jurisdiction over design matters to the Federal Magistrates’ Court, (b) amending secret use in patent law, (c) ‘fixing up’ aspects of the grace period in patent; (d) a new system to allow the Commissioner to revoke acceptance of a patent prior to grant; (e) repealing the requirement in s 45 for a patent applicant to inform the Commissioner of the results of certain searches.

With such a smorgasboard of issues, it’s hard to know what to comment on. Much of what I might otherwise have said about the patent stuff has already been said by Patentology: that attempting to raise the bar in inventive step is a good idea but the amendments probably don’t go far enough; that the change in the usefulness requirement is good for biological type inventions where patents have been granted for fairly speculative ‘uses’. (I disagree with Patentology about experimental use I have to say – I think we need the exception in there, although I dread it’s going to end up being narrowly read by our courts).

But here’s a couple of things that haven’t been discussed in the patentology comments or by Warwick Rothnie.

First, we have a pretty complete re-write of the Trade Mark criminal offences, using that awful, awful style of criminal drafting that seems to prevail at a Federal level these days (if you remember the new copyright criminal offences, introduced in 2006, you’ll get the picture – pages and pages of text and none of us any the wiser about what it means because you have to go to the Criminal Code to even begin to make any sense of it).

I suppose we should be grateful that there’s no proposal here to introduce Infringement Notices, as we had in copyright back in 2006 (then again, it would be hard to justify introducing infringement notices in Trade Mark when they haven’t even been used in copyright 4 years after coming into the legislation, wouldn’t it?).

But what’s really interesting about the TM criminal offences is two things.

First, some of the offences apply a standard of ‘negligence’ to the mental element. Thus it will be a summary offence to apply a mark to goods, being negligent as to whether the mark is, or is substantially identical to, a registered trade mark. The first problem is – why would negligence be an appropriate standard here at all? Well, so I thought the Explanatory Memorandum might help here. So I went to look, and it says this:

‘It is appropriate to have a lower fault element of ‘negligence’ for the circumstance elements of the offences because of the unique nature of intellectual property rights. Despite the clear legal position that intellectual property is a form of personal property, evidence has shown that some people see the violation of intellectual property rights as trivial and a ‘victimless crime’. Such attitudes may extend to an unacceptable failure to ascertain the factual circumstances in which their conduct would be criminal. However, consistent with the general approach taken to other forms of personal property, and to copyright goods, a person who uses a registered trade mark (what could be another person’s property) should be under an objective obligation to check that the mark is not registered. Otherwise, the effectiveness of the deterrent is undermined, with the risk that intellectual property rights are less protected than tangible property rights. The introduction of an objective negligence standard will assist the effective administration of justice and perform an important educative role in ensuring that people take intellectual property crime seriously.’

Wait – what? So hang on, failing to check the trade marks register is a criminal offence? And we want it to be criminal because that will ‘perform an important educative role’? Last theory on this kind of thing I read, over-criminalising behaviour that the average person does not think of as criminal was not likely to increase respect for either trade mark law or criminal law.

And I still don’t even know what it means to be [criminally] ‘negligent’ about whether your mark is identical to a registered mark. Doesn’t ‘negligence’ import some kind of understanding of what would be considered appropriate standards of behaviour (you know, reasonable man/woman and all that?) And if that’s true, what is the standard of vigilance about branding activity that is considered societally acceptable these days? Is Woolworths criminally negligent for using ‘honest to goodness’, that being the trade mark of some organic supplier or other? Honestly, I wonder whether they really think these things through sometimes.

Something else that hasn’t got a lot of comment is this new customs scheme for requiring people whose goods are seized to actively claim their goods. I don’t know, and I’ve not thought it through sufficiently, but I wonder whether that is consistent with Article 55 of TRIPS, that says goods shall be returned if the IP owner doesn’t commence proceedings to continue the suspension. I mean, I know that you can have further customs procedures without breaching TRIPS (you can have payable duties and the like), but can you impose a further element (this claim scheme) that is clearly geared entirely towards assisting IP owners in enforcement and that leads to forfeiture, effectively on the grounds of claimed infringement, without legal proceedings? I’m not at all sure about that.

Here’s another interesting little beastie in the Bill. Proposed s 50A of the Patents Act. This would give the Patent Commissioner power to revoke an acceptance any time before grant. The EM says it will help with admin type problems, but it seems to me that it might be used like the equivalent TM Act provisions are being used – as a kind of opposition-lite, where a prospective opponent writes to the Commissioner asking them to exercise their discretion to revoke – without going through the full opposition process. I see the potential for more strategic game playing, even as the Bill has tried to remove other parts of the Act that have facilitated various interesting patenting and patent dispute strategies.

Overall, too, I wonder about some of the moves in patent. It feels like IP Australia have deliberately sought to shift Australian law closer to European patent law – for example, using European language in relation to support and other documentary requirements. Why Europe? Why European law in particular? Aren’t we meant, under our Free Trade Agreement with the US, to be ‘endeavour[ing] to reduce differences in law and practice between [Australia and the US], including in respect of differences in determining the rights to an invention, the prior art effect of applications for patents, and the division of an application containing multiple inventions’? (AUSFTA Article 17.9.14). I mean, I’m not a big AUSFTA fan, as you may know, but this does look quite a lurch in a different direction, which makes you wonder whether Article 17.9.14 has any relevance at all…

One more thing worthy of comment. Item 86 in Schedule 6 amends, and broadens, another copyright exception. This one is the one found in the Patents Act s 226, and allows reproduction and other uses of documents open to public inspection. I’ve said it before, I’ll say it again. Every time the government decides it is going to create a new little copyright exception so it can do something it needs to do, it really ought to be asking itself: why do I have to do this? And wouldn’t it make more sense to introduce a general, fair-use type exception? Honestly???