Australia’s IP system has come under the spotlight as the government considers possible reforms. Naomi Pearce and Nigel Lokan of K&L Gates speak to Tammy Facey

In light of the Australian government calling for an investigation into the quality and handling of IP in Australia, how likely is patent reform?

Naomi Pearce: It is not unlikely, but it is easy to become cynical about the fact that earlier inquiries into Australia’s intellectual property system have not yet resulted in law reform. The Australian government’s further inquiry is an acknowledgement that we still do not have the balance right in relation to IP laws in Australia.

Some important changes were suggested in the report of the 2013 Pharmaceutical Patent Review (PPR), but they fell by the wayside due to political changes in Australia at the time. The PPR report was published in May 2013, and in the six months that followed, Australia changed its prime minister twice.

Nearly three years later, it is great to see the subsequent Australian government dust off the reports of the previous government and commission its own inquiry, with a view to taking steps toward a more balanced IP system in Australia. While we are not holding our breath, we hope to see further law reform.

In relation to patents, a significant improvement would be made if the PPR report recommendations regarding manufacture for export (MFE) were implemented in Australia. This would enable companies to manufacture pharma/biopharma products in Australia for export only, during the term of a patent term extension in Australia. The effect would be that Australia would retain its pharmaceutical manufacturing capabilities as less pharma/biopharma manufacturing would be driven offshore. IP Australia certainly seems to be supporting MFE implementation in Australia in its latest submission to the Productivity Commission.

How can patents be challenged pre- and post-grant, without going to court?

Nigel Lokan: Australia has a pre-grant opposition system in which any person may oppose the grant of a patent. A demonstration of standing is not required. An opposition may be filed in the name of an anonymous third party, or ‘straw man’. If an opponent wishes to appeal against the IP Australia decision regarding an opposition, an appeal may be filed in the Federal Court.

While Australia does not have a patent appeal board, patent applicants can request a formal hearing before IP Australia at any time if prosecution of an application reaches an impasse. However, such requests are rare. These may be become more common in the future in view of the recent reduction in the time allowed for patent applications in Australia to be accepted (reduced from 21 months to 12 months from the day of the first report).

Until recently, the IP Australia has been pro-applicant for granting patents. In April 2013, various law reform initiatives were introduced, including the Raising the Bar Act, which was aimed at bringing Australia in line with its major trading partners, and at ‘raising the bar’ for standards of patentability in Australia.

There has only been one opposition decision to date since the Raising the Bar amendments came into force, where an application was found invalid because of lack of descriptive support. The pro-applicant stance of the IP Australia may be shifting, but it is early days.

Post-grant, ex parte re-examination is also available. Given recent reforms to the opposition system to reduce delays and hear matters more expeditiously, in our view Australia is unlikely to implement an inter partes review system like the US in the foreseeable future.

Is Australia likely to create a separate route for resolving patent cases in a time and cost-effective way?

Pearce: There has not been any real discussion in Australia about law reform introducing a low cost court alternative to resolution of IP disputes such as the Intellectual Property Enterprise Court (IPEC, previously the Patents County Court) in London, but we think this would be a good thing for Australia.

Any type of IP protection is only as good as the owner’s ability to enforce. For smaller companies or private individuals, the costs of patent litigation, and the size of the Australian market, may result in cases not getting litigated in Australia.

If an efficient low-cost court alternative such as the UK IPEC were introduced in Australia, some of the legitimate cases could be heard in a cost- and time-effective manner. We believe an optional low-cost, fast track would be of great benefit in certain situations.

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