Innovation patents aren’t Australia’s first ‘second-tier’ patent. Petty patents were Australia’s first ‘second-tier’ patent and were introduced in 1979. Petty patents differed from standard patents with a term of six years, limited number of claims, and different procedures for grant, but importantly the same inventive step threshold as a standard patent still applied.

The petty patent wasn’t without issue, and in 1997 the Government released a response to a number of recommendations on how the petty patent should be abolished and replaced with a true second-tier patent. In addition, suggestions were accepted that a new second-tier patent with a lower ‘inventiveness’ requirement be created to fill a perceived gap between registered design rights and standard patent protection. The aim of the innovation patent system was to provide a low cost, efficient way to help small to medium enterprises (SMEs) protect their intellectual property (IP).

And so, in June 2000 the Patents Amendment (Innovation Patents) Bill 2000 was introduced to the Australian Parliament, and by May 2001 the innovation patent commenced. The fact that an innovation patent could be granted shortly after filing brought much scepticism, but this quickly subsided, and the innovation patent became an immediate hit.

Despite this success, it would take until 2008 for an innovation patent to be enforced (Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd) and for guidance to be received on the threshold required for an “innovative step”. In short, the Delnorth decision found that the innovative step threshold is met if a feature exists that provides a technical effect to the invention, even if this effect would otherwise be considered obvious. The intention to provide a lower threshold to patentability had become a reality.

The low patentability threshold of an innovation patent ended up being a double-edged sword. Not only did it allow “lesser inventions’ to be patented, but it also provided much stronger protection for more ‘standard’ inventions. This benefit was used extensively during enforcement, particularly by large organisations, where applicants would typically file several innovation patents and use them in addition to standard patents against alleged infringers. After all, if an invention is easier to patent using an innovation patent, it should be harder to revoke. For these reasons, innovation patents were more favoured by large corporations than SMEs.

The fast granting of innovation patents also meant that innovation patents of low quality with no prospect of ever being enforced were filed. Some saw this as an abuse of the system.

In February 2011, the Government initiated a review of the innovation patent system to assess whether it was meeting the desired objective. This review was finally delivered in 2014 with a recommendation to abolish the innovation patent, even though submissions considered in the review were overwhelmingly against abolishment. Behind the scenes, a review of the economic impact of innovation patents was performed by IP Australia and delivered in May 2015. In August 2015, the Productivity Commission also began a review of Australia’s IP system and published its finding in December 2016. They also recommended the innovation patent be abolished.

Then, in August 2017, the Government released its response to the Productivity Commission report where it accepted the recommendation to abolish the innovation patent. After a number of additional reports and submissions over the subsequent 12-24 months, a bill was passed to abolish the innovation patent, and on Thursday 27 February 2020, IP Australia announced that it will no longer accept new innovation patent applications from 26 August 2021.