IP Australia has foreshadowed moves to phase out ‘innovation patents’ which it says have not achieved their intended objective.
According to IP Australia, innovation patents protect inventions that do not meet the inventive threshold required for standard patents and can last for up to eight years.
In a statement, the Agency said economic evidence showed the innovation patent system had a net cost of $11 million a year to all Australian business.
In addition it had failed to incentivise research and development and allowed big business to block small and medium enterprises (SMEs) from innovating.
“Big business can use innovation patents to create patent thickets, where a firm files a series of innovation patents surrounding an SME’s product,” IP Australia said.
“These tactics suffocate an SME’s freedom to operate, making it harder for it to compete with big business.
“In 2017 big business and foreign applicants obtained almost four times the number of enforceable innovation patents than SMEs.”
It said low thresholds and unexamined innovation patents created uncertainty around where SMEs had freedom to operate and this was eroding confidence and investment in SME innovation.
“Obtaining protection through an innovation patent can backfire if a business wants to export,” the Agency said.
“Innovation patents are not recognised overseas and can’t be used as a basis for foreign patents. Innovation patents disclose the SMEs’ inventions, exposing them to overseas copycats.”
IP Australia said it remained committed to dedicated support services to help SMEs navigate the IP system.
“SMEs already prefer standard patents, and lodge more than twice as many standard patents as innovation patents,” it said.
“Small businesses, including those regularly using innovation patents, will receive support.”
It said this included access to IP Australia’s fast track examination pathway on request, which meant SMEs who wanted a fast patent could get a report within eight weeks, as fast as the current innovation patent.