An International Guide to
Patent Case Management for Judges

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2.2 Patent institutions and administrative review proceedings

2.2.1 Patent institutions

The Australian patent system is administered by the Australian Patent Office7 (which is responsible for the administrative aspects of the patent system, including filing, examination and pre-grant “opposition” proceedings) and the Federal Court of Australia.8

As noted above, Australia has recently abolished its second-tier “innovation” patent system, and applications for innovation patents ceased on August 26, 2021. The Australian Patent Office also facilitates the registration of overseas patent applications in Australia through the Paris Convention and the Patent Cooperation Treaty.

The Federal Court has jurisdiction to hear patent infringement, invalidity, entitlement and related disputes, together with appeals from the Australian Patent Office. It has jurisdiction in a number of other areas of law, including commercial and corporations laws, administrative law, industrial law, federal crime, admiralty and taxation. The Federal Court is located in the capital city of each state and territory, has a specialized panel of judges for patent matters and has a dedicated practice note for intellectual property matters, including patent disputes.9

2.2.2 Administrative review proceedings

2.2.2.1 Avenues of review

The Federal Court of Australia is the institution in which the validity of a patent may be challenged. Prior to grant, patents can be opposed in the Australian Patent Office. The available avenues for review of an invalidity determination depend upon the decision-maker, the type of decision and whether the determination was made pre-grant or post-grant.

The Intellectual Property Law Amendment (Raising the Bar) Act 2012 (Cth) made a number of amendments to the Patents Act 1990 (Cth), including the internal grounds of invalidity and examination and opposition procedures in the Patent Office. The present section refers to the law that applies following those changes. However, it is important to be aware that, depending on the date on which an application was filed, an examination was requested, or the application was accepted, it will be necessary to consider the provisions in the Patents Act 1990 (Cth) prior to the amendments.

2.2.2.1.1 Pre-grant – refusal of acceptance

Following examination of a patent, the Commissioner of Patents may refuse to accept a request for a standard patent or specification.10 The grounds of refusal for invalidity include a failure to comply with the internal requirements for invalidity (including sufficiency, best method and support) and that the invention is not a patentable invention (it is not a manner of manufacture, lacks utility, is not novel or does not involve an inventive step).

The decision of the Commissioner to refuse to accept a patent request or specification may be appealed to the Federal Court of Australia.11

An examiner will issue reports if they reasonably believe that there are grounds of objection to a patent, and an applicant will be provided with opportunities to respond to and overcome the objections until the deadline for acceptance. In practice, most patents lapse rather than being formally refused.

2.2.2.1.2 Pre-grant – opposition

Once acceptance of a standard patent has been advertised, the grant of the patent may be opposed by any person. The notice of opposition must be filed within three months from the date acceptance is published.12 The grounds on which the grant may be opposed include the internal requirements for invalidity and that the invention is not a patentable invention.13

If the Commissioner of Patents is satisfied that a ground of opposition exists on the balance of probabilities, the Commissioner may refuse the patent application.14 However, the Commissioner must first give the parties a reasonable opportunity to be heard and (where appropriate) allow the applicant an opportunity to amend the specification.

The decision of the Commissioner following an opposition may be appealed to the Federal Court of Australia by either the opponent or the applicant.15

2.2.2.1.3 Pre-grant and post-grant – reexamination

The Commissioner of Patents may reexamine a standard patent if it has been accepted but not yet granted. The decision to reexamine pre-grant is at the discretion of the Commissioner but may occur, for example, following the identification of new prior art or the receipt of a notice from a third party.16 Following grant, the Commissioner may reexamine a patent on their own initiative and must reexamine the patent if formally requested to do so by a third party in the approved form or following a direction from a court.17 However, the Commissioner may not reexamine a patent if court proceedings are pending.

The Commissioner may refuse to grant the patent, or may revoke the patent, if the Commissioner makes an adverse report on reexamination (which includes on invalidity grounds) and is satisfied on the balance of probabilities that there is a lawful ground of objection to the specification.18 However, the Commissioner must first provide the applicant or patentee an opportunity to respond to the report and be heard and (where appropriate) allow the applicant an opportunity to amend the specification.

The decision of the Commissioner to refuse an application or to revoke the patent following reexamination may be appealed by an applicant to the Federal Court of Australia.19

A third party that has requested reexamination has no right of appeal of the decision of the Commissioner to the Federal Court. However, the third party may apply to the court for revocation of the patent or may seek judicial review, as discussed in Sections 2.2.2.4 and 2.2.2.5.

2.2.2.2 Claim construction

Allowing for the differences in procedure between them, the process for and the procedures governing claim construction in the Australian Patent Office are generally the same as in the Federal Court of Australia. In particular:

  • Claims are generally construed in the Patent Office at the same hearing as that involving whether a patent is valid and ought to be granted.
  • Although expert evidence on the meaning that the skilled addressee would give to technical or scientific terms and phrases may be submitted, claim construction is a matter for the Patent Office.

However, the Australian Patent Office only construes a claim in the context of a determination of validity or in claim amendment, not infringement (for a further discussion on claim construction with respect to infringement, see Section 2.5.1).

2.2.2.3 Role of experts
2.2.2.3.1 Australian Patent Office (IP Australia)

Expert evidence may be filed in the Australian Patent Office in the following invalidity proceedings:

  • oppositions to the grant of a standard patent;20
  • reexamination of an application or granted patent;21 or
  • Section 27 and 28 submissions.22

Generally, expert evidence is given by way of declaration under the Patents Regulations.23 While the Patent Office has the power to require witnesses (including expert witnesses) to give oral evidence at a hearing, such evidence is, in practice, rarely required.24 The rules of evidence do not apply in the Patent Office. However, greater weight is likely to be given to expert evidence that complies with the rules of evidence on admissibility.

Expert evidence in the Australian Patent Office is generally directed to the following topics:

  • claim construction and prior art;
  • common general knowledge (CGK); and
  • obviousness.
2.2.2.3.2 Claim construction and prior art

While claim construction is ultimately a matter for the Patent Office, the claims are read through the eyes of the skilled addressee in light of the specification as a whole and the CGK before the priority date.25 Expert evidence can assist the Patent Office in placing itself in the position of a person acquainted with the surrounding circumstances as to the state of the art at the time.26 Expert evidence is particularly important where the words used in a patent claim or prior art document have a technical or special meaning in the relevant field.27

2.2.2.3.3 Common general knowledge

The state of the relevant CGK for a patent or pending application is established by evidence from experts in the technical field concerning the extent to which certain information was known and accepted by others in the field.28

2.2.2.3.4 Obviousness

An opinion from an expert as to whether an invention is obvious is unlikely to be helpful. This is because questions of obviousness and inventive step are ultimately for the court or Patent Office to determine, irrespective of the opinion expressed by any number of experts.29

However, where obviousness is sought to be established, it is common for parties to set a design task for an expert representing the person skilled in the art. For example, an expert may be asked to solve the problem identified in the patent or pending application using only information that was CGK at the priority date.

2.2.2.3.5 Hindsight

When briefing an expert to provide evidence in relation to obviousness or inventive step, care must be taken to ensure that the evidence is not tainted by hindsight, either as a result of the witness applying hindsight or from the instructions given to the witness. Accordingly, where obviousness evidence is required, it is generally prudent for those taking the evidence to proceed in the following manner:

  1. 1. Prior to providing the expert with the patent specification or any prior art documents, take the witness’s evidence of the CGK at the relevant date. It is important to use nonleading questions when taking this evidence.
  2. 2. If undertaking a design task, this evidence should be based on the CGK evidence given by the witness in the preceding step and any prior art information (document or act) that may permissibly supplement the CGK pursuant to Section 7(3) of the Patents Act 1990 (Cth).
  3. 3. Only after obtaining the evidence in Steps 1 and 2 should the expert be given a copy of the patent-in-suit for the purposes of construction and comparison with the prior art.
2.2.2.4 Appeals to the Federal Court of Australia, Full Court of the Federal Court and High Court of Australia

An appeal from a decision of the Commissioner of Patents (including to refuse acceptance or revoke grant) lies to a single judge of the Federal Court of Australia.30 A party may appeal this decision of a single judge to the Full Court of the Federal Court only with leave.

An appeal from a decision of a state or territory supreme court lies to the Full Court Federal Court.

The question of whether leave to appeal to the Full Court should be granted may be decided by a single judge or may be referred to the Full Court. The grant of leave to appeal is discretionary, and relevant factors may include whether the decision is attended with sufficient doubt, whether substantial injustice will result from a refusal to grant leave and whether the appeal involves a question of public importance or of pure law. Where a party has unsuccessfully opposed the grant of a patent twice, there is limited scope for a further appeal.31 Conversely, the grant of leave to appeal is more likely where the grant of a patent has been refused, as this would be determinative of the patentee’s rights.32

An appeal from a first-instance court decision on invalidity (such as an application for revocation) lies to the Full Court of the Federal Court.33 Leave to appeal is not required for a final decision on invalidity.

A party may seek special leave to appeal to the High Court of Australia from a decision of the Full Court. However, the grant of special leave to appeal such a decision is rare.

2.2.2.5 Judicial review and review by the Administrative Appeals Tribunal

The Patent Office is an administrative decision-maker. A person aggrieved by a decision of the Commissioner of Patents that is of an administrative character may therefore seek judicial review in the Federal Court or Federal Circuit Court. The nature of a judicial review is more limited than an appeal and focuses not on the merits of the decision but on the legality of the decision and the processes followed. Grounds of judicial review include that the decision involved a breach of the rules of natural justice, a failure to observe required procedures, the absence of jurisdiction or authority, an improper exercise of power, an error of law or that it was induced or affected by fraud.34

An affected person may also seek a merits review of certain specified decisions of the Commissioner in the Administrative Appeals Tribunal.35 However, this does not include the final decisions of the Commissioner on invalidity that have been discussed in this section.

2.2.2.6 Nature of appeal from an invalidity decision of the Commissioner of Patents

An appeal from a decision of the Commissioner of Patents to the Federal Court of Australia must be filed within 21 days of the date of the decision unless an extension of time is granted.36 The Commissioner is entitled to appear and be heard in any appeal against a decision of the Commissioner.37 However, the Commissioner is not automatically a party to any appeal unless there is no other party opposing the appeal.38

An appeal to the Federal Court from a decision of the Commissioner is not an “appeal” in the strict sense – it is in the Federal Court’s original jurisdiction and conducted as a hearing de novo.39 This means that the court stands in the shoes of the Commissioner and makes the decision afresh. The court is not confined by the arguments or evidence that were before the Commissioner, including the grounds of invalidity. The court may receive fresh evidence and direct that the proceeding be conducted as it thinks fit.40 Evidence that was before the Commissioner may be admitted with leave41 but must also comply with the general rules of evidence.

The Federal Court may affirm, vary or reverse the decision of the Commissioner and may give any judgment or make any order that, in all the circumstances, it thinks fit.42 While the Federal Court is generally confined to the subject matter of the controversy that was before the Commissioner, the court also has the power to direct the amendment of a patent application on an appeal.43

2.2.2.7 Innovation patents

This section has focused on the avenues for review of decisions relating to the validity of standard patents. Key differences in relation to the review of invalidity decisions relating to an innovation patent, by contrast, are that an innovation patent is examined only after grant and reexamined or opposed only after certification. Following examination, reexamination or opposition, the Commissioner of Patents may decide to revoke the grant of an innovation patent, including on invalidity grounds.44 An appeal lies to the Federal Court of Australia in relation to a decision to revoke an innovation patent. Innovation patents are being phased out, with the last date for filing an application having been August 25, 2021.