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HAVE WE HEARD THE DEATH KNELL FOR THE INNOVATION PATENT SYSTEM?

The Advisory Council on Intellectual Property (ACIP) undertook a lengthy review on the effectiveness of the Australian innovation patent system.  The review concluded in June 2014 with the publication of a final report.  In the report, ACIP commented that it was not able to reach any clear conclusions on whether to recommend that the innovation patent system be retained or abolished.  Instead the report offered recommendations for ways to improve the effectiveness of the system and address perceived shortcomings.

ACIP Development

In an unexpected move, ACIP has re-issued their final report with a Corrigendum which pulls no punches in recommending that the Government should abolish the innovation patent system.

The Corrigendum refers to the fact that substantially more information has become available; which, upon consideration, has led ACIP to make the recommendation.

The key influence is noted to be a published research paper commissioned by IP Australia which reviewed the economic impact of innovation patents.

The main policy objective behind the introduction of the innovation patent system was to encourage innovation among Australian Small and Medium sized Enterprises (SMEs).  Australian SMEs and individual inventors were targeted, and figures have shown that they have indeed been the main users of the system.

However, the conclusions drawn by the economic report were that the innovation patent was failing to encourage innovation among the targeted users, and that from an economist’s perspective the burdensome costs of maintaining the system outweighs any benefits offered by it.

ACIP refers to the negative net economic impact conclusions of the economic report in stating the opinion that the innovation patent is not achieving its main policy objective.

IP Australia

In a further development, IP Australia have now issued a public consultation paper seeking submissions on what should be the fate of the innovation patent system and inviting alternative suggestions of ways to encourage innovation amongst SMEs.

Ultimately, the fate of the innovation patent system rests with the Australian Government.  However, we may expect that any decision will be delayed until IP Australia have completed their consultation process.