Australia reviews tier-two software patents

Council highlights overseas restrictions.

The Federal Government may consider excluding software from its second-tier patent system to better align Australian patents with those of trading partners like Japan and Korea.

In February, Innovation Minister Kim Carr asked the Advisory Council on Intellectual Property (ACIP) to review the innovation patent system, which replaced the petty patent system almost eleven years ago.

Innovation patents required a lower degree of inventiveness than standard patents but were granted for a maximum of eight years, instead of the standard 20.

In an issues paper released last month (pdf), ACIP raised concerns that the innovation patent system may be incongruous with the intentions of the Government's ‘Raising The Bar’ reforms.

The Bill, proposed by Carr in June, would amend Australian intellectual property laws to strengthen rights holders’ protections but make it more difficult for patents to be granted.

By raising patent standards, Carr hoped to “align Australia with key trading partners” and encourage foreign companies to bring their technology to Australia.

Raising The Bar amendments affected both standard and innovation patents but ACIP secretariat Jeff Carl explained that the gap in requirements between the two tiers would remain.

Further, ACIP questioned the inclusion of computer software in the innovation patent scheme, noting that both Japan and Korea excluded computer software from their second-tier patent programs.

“We’re just looking to see if we should align ourselves with our major trading partners,” Carl said.

In its issues paper, ACIP noted that it may be difficult to justify Australia's low requirements for software innovation patents given that software was excluded from patent systems in Japan and Korea.

Carl said the council did “not have a position [about software innovation patents] at the present time” but would “look at any opportunities to enhance the system” if the need arose.

Although the council had passed the halfway point of the public consultation period for its innovation patent system review, Carl said it was yet to receive any written submissions.

A spokesman for the Innovation Minister said the review aimed to "ensure that the right protection options are in place for Australian inventors".

ACIP had been asked to look into whether the system effectively stimulated innovation by small to medium business enterprises, if there were any new opportunities for enhancing its effectiveness and efficiency; and any unintended consequences arising from its implementation.

The public consultation period closes on 14 October.

Software patents

The issue of software patents was raised in a separate ACIP report on patentable subject matter last December (pdf) – the most recent of three reviews informing the Raising The Bar reforms.

At the time, ACIP noted concerns that the threshold of inventiveness was too low and patents could “hamper innovation in some technological fields”.

Although it noted developers’ arguments against software patenting, the ACIP noted that inserting specific exclusions into legislation could bring about “unforeseen consequences”.

It recommended the Government clarify the purpose and requirements of Australia’s Patent Act 1990, without making any recommendations specific to software.

Minister Carr's spokesman said the Government was considering its response to the ACIP report.

The new Raising the Bar Bill, which would be debated when Parliament sat again on 11 October, included "a number of reforms to raise the standards of all patents, including software patents", she said.

Computer software has been patentable in Australia since 1991, following a case between IBM and the Commissioner of Patents in the Federal Court.

Odette Gourley, a partner at law firm Corrs Chambers Westgarth, said early debates about software patenting had “settled down” and disputes now tended to take place on a case-by-case basis.

“The idea that you can protect software with patents is generally accepted in developed economies,” she said.

Gourley said it was too early to tell how Raising The Bar amendments would play out in the courts, noting that she had “clients on both sides of the fence”.

“Consistency with international stakeholders is obviously highly desirable for Australia,” she said of moves to align Australian patent standards with those of its trading partners.

She was also uncertain of the outcome of ACIP's current review, noting that the ten-year-old innovation patent system was still in its "relatively early days".

Earlier this month, the OECD issued its Science, Technology and Industry Scoreboard 2011 that found a rise the number of patent filings but a “dramatic” drop in their quality over the past two decades.

Patents relating to IT methods were found to be of highest quality in Canada while those relating to “computer technology” were of highest quality in Australia.

The OECD’s calculations, based on the Worldwide Patent Statistical Database, found that Korea had a “competitive advantage in ICT-related innovations”, producing the highest quality of patents to do with telecommunications, electrical machinery and audio-visual technology.