2.1 Overview of the patent system
2.1.1 Evolution of the patent system
The Australian patent system is governed by the Patents Act 1990 (Cth). The origins of that Act, and the Australian patent system generally, can be traced back to English law and the Statute of Monopolies 1623.1
Section 6 of the Statute of Monopolies 1623 (which is expressly referred to in Section 18(1)(a) of the Patents Act 1990 (Cth)) provided an exception for patents to the general position that monopolies were contrary to law. Section 6 described the carve-out for patentable inventions in the following terms:
Provided alsoe That any Declaracion before mencioned shall not extend to any tres Patents and Graunt of Privilege for the tearme of fowerteene yeares or under, hereafter to be made of the sole working or makinge of any manner of new Manufactures within this Realme, to the true and first Inventor and Inventors of such Manufactures, which others at the tyme of makinge such tres Patents and Graunts shall not use, soe as alsoe they be not contrary to the Lawe nor mischievous to the State, by raisinge prices of Commodities at home, or hurt of Trade, or generallie inconvenient.
In broad terms, the Statute of Monopolies restricted the grant of patents to “any manner of new Manufactures” to the true and first inventor and imposed a limited term of 14 years for the grant of letters patent. By the early 1600s, the grant of letters patent and other privileges by the Crown had become controversial: they were being used merely as a convenient way for the Crown to raise revenue and were being granted in respect of products and processes that were already being used in the public domain, thereby harming trade and commerce.2 The Statute of Monopolies sought to address these concerns by, among other things, limiting the grant of letters patent to particular subject matter (namely, any manner of new manufacture) and restricting the grant to a limited term. Following the passing of the Statute of Monopolies, the patent system in England continued to develop, eventually leading to the enactment of the Patents, Designs and Trade Marks Act 1883 (U.K.), which is the basis of the modern patent system in the United Kingdom and in Commonwealth countries.
Prior to Federation in 1901, each Australian colony had its own Patents Act that was modeled on the Patents, Designs and Trade Marks Act 1883 (U.K.). These Acts continued in force until the Australian Parliament enacted the Patents Act 1903 (Cth) pursuant to its legislative powers under Section 51(xviii) of the Commonwealth Constitution. The Patents Act 1903 (Cth) was replaced by Patents Act 1952 (Cth), which was in turn replaced by the Patents Act 1990 (Cth). The Patents Act 1990 (Cth), together with the Patents Regulations 1991 (Cth), came into operation on May 1, 1991.
The Patents Act 1990 (Cth) provides protection for two types of patents in Australia: the “standard” patent and the “innovation” patent. The main difference is that “innovation” patents have a shorter term of eight years and involve the lower threshold of an “innovative” step when compared to the prior art basis (as opposed to the “inventive step” required for standard patents).
The Patents Act 1990 (Cth) has undergone amendment several times since its enactment, including the reforms introduced by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). These reforms apply largely in relation to patents requested for examination after April 15, 2013, and are designed to raise patentability thresholds to align more closely with the laws of overseas jurisdictions. More recently, the Australian Government passed the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (Cth). These reforms involved, among other things, the introduction of an objects clause into the Patents Act 1990 (Cth), the phasing out of Australia’s “innovation” patent system3 and amendments to the compulsory licensing scheme in Chapter 12 of the Patents Act 1990 (Cth).
Australia is also signatory to a number of international treaties relating to patent rights, including the Paris Convention for the Protection of Industrial Property,4 the Patent Cooperation Treaty,5 the Agreement on Trade-Related Aspects of Intellectual Property Rights6 and various free trade agreements. Australia’s obligations under these treaties in relation to patent rights are reflected in the Patents Act 1990 (Cth).
Patent disputes are determined under the Patents Act 1990 (Cth) as interpreted by the case law that has developed under it, and its predecessor Acts. The development of modern Australian patent law has most closely followed that of the law of the United Kingdom, although there has been a measure of divergence from that law since that country joined the European Patent Convention in 1977. Often, during the course of patent trials, the parties inform the court of developments in the United States, the United Kingdom and Europe.
2.1.2 Patent application trends
Figure 2.1 shows the total number of patent applications (direct and Patent Cooperation Treaty (PCT) national phase entry) filed in Australia from 2000 to 2021.