Australian Patent Office publishes consultation paper proposing reforms to “improve” patent system

It is important to note that at this stage, the proposed reforms and solutions put forward in this paper are not law and no legislative changes have been made to current office practice. However, the proposed changes and polices discussed in this paper are significant and warrant close attention by users of the Australian patent system (along with other forms of intellectual property such as trade marks). This article focuses on some of the key proposed patent reforms that, if adopted, could significantly influence how applicants approach not only the prosecution of their own patent applications, but dealing with the rights of third parties that could impact commercial decisions.

Response-based examination

One major proposal contemplates introducing a response-based examination system for patent applications, replacing the current timeline which is governed by a 12-month acceptance deadline.

Currently, once a first office action issues, applicants have a single 12-month period to gain allowance. Within this period, there is no statutory timeframe to respond to an office action and no limit to the number of responses that can be filed. If needed, divisional applications can also be filed to essentially restart the clock once a new first office action issues thereon.

IP Australia considers the current acceptance-based system contributes to prolonged pendency, uncertainty for third parties, and inefficient use of examination resources, and proposes a model our overseas colleagues will recognise. The reforms propose shifting patent prosecution in Australia from the single long allowance deadline to shorter response deadlines (e.g., 2-months) and proposes a cap on the number of responses that can be submitted (e.g., 3 office responses) before “rejection procedure” commences.

This is arguably a step towards aligning Australian patent prosecution with its major trading partners, such as United States and Europe, where often our acceptance/allowance deadline is confused for a response deadline. However, it is not clear from the paper what will constitute a “rejection procedure”, and the finality any such rejection presents to pursuing subject matter in continued examination or divisional applications. In addition, the exemplified 2 months for a response is, in our view, too short a period in order to prepare a reply, and no detail has been provided about possible extensions and whether official fees for these extensions would apply.

Stricter timelines for third party-initiated examination

Although not being proposed as a change as such, the paper raises a few policy issues for consideration. Related to the examination timeline, IP Australia alleges that the present patent system provides extensive mechanisms for patent applicants to prolong the pendency of patent applications, to the perceived detriment of third parties who wish to know, with a greater degree of certainty, whether a particular application/resulting patent will impact their freedom to operate. As part of a policy review, IP Australia has asked for feedback on these perceived applicant-led delays. It has floated the possible approach of allowing third parties to register their interest in a patent application and trigger a mechanism that would expedite examination and the applicant’s need to respond. Applicants would be on notice to gain allowance and cannot extend any response/allowance deadline by filing a divisional application unless a unity issue is raised. This could put significant pressure on applicants to respond to Office Actions and hinder the ability to divide up subject matter between different divisional applications.

Shortening oppositions to patent term extension (PTE)

Another proposal recommends shortening how long it takes to conduct an opposition to grant of a PTE. Briefly, a PTE is available for certain patents with claims directed to a “pharmaceutical per se” or a pharmaceutical substance when produced by recombinant DNA technology.

Currently, oppositions to pharmaceutical PTEs are currently treated as substantive oppositions - imposing fixed and prolonged evidence periods identical to those used for full validity challenges. However, in practice, PTE disputes usually turn on narrow statutory questions such as Australian Register of Therapeutic Goods listing dates and identification of the first approved product. As such, despite typically involving significantly less evidence than standard patent oppositions, PTE challenges before the patent office still routinely take more than a year to resolve, prolonging uncertainty around generic market entry and associated pricing impacts.

IP Australia proposed to reclassify such PTE oppositions as procedural matters, meaning the patent office will have discretion to set shorter, case-specific evidence periods, or to dispense with evidence entirely where the issues are self-evident. The intended outcome is faster resolution, reduced cost and greater market certainty for both originators and generics.

Extensions of time

Another policy being reviewed is Australia’s generous extension of time provisions.

Currently, parties seeking an extension of time for missed deadlines typically need to provide evidence, usually in the form of a declaration/affidavit, supporting the reasons for granting the extension. This can be a costly exercise, especially where only a short extension is being sought, which often poses minimal disadvantage to competitors and other third parties. Additionally, extensions of time can be filed at any time (including potentially years after any missed deadline and subsequent lapsing of patent rights), exposing third parties to business risk if they invest in/launch technology in Australia believing the right has ceased.

Whether or not the above presents a real issue needing addressing, IP Australia outlines a possible solution to this is to permit a single EPO “further processing” automatic extension of time for short periods (e.g. up to 3 or 6 months) after a deadline has passed, which would only require a fee to be paid and no substantive evidence required, and implementing a statutory cut off thereafter where a missed deadline cannot be extended - providing clearer freedom to operate certainty for third parties.

Take home points

It is important to stress that this is just a consultation paper at this stage, not an actual change in policy nor practice at this time. However, there are numerous ideas and potential policy positions outlined in the document that could have significant ramifications for intellectual property rights in Australia. Whilst various changes are proposed, significant questions are already being raised about practical aspects with the implementation of any change in policy.

It is expected that numerous submissions will be filed by the 2 April 2026 deadline. FB Rice will provide updates if there is any resulting change in practice as a result of the consultation process.