The innovation patent is dead but utility models are alive and kicking

They say all good things must come to an end - and for the innovation patent, Australia’s second tier patent system, that time is nearly upon us. For start-ups and SMEs, the innovation patent was an easy, quick and cost effective option to obtain protection in Australia, compared to the more involved and expensive standard patent. Following the demise of the innovation patent, start-ups and SMEs will face the higher cost and more onerous requirements to file and prosecute a standard patent application to protect their inventions in Australia.

Fortunately, many other jurisdictions have second tier patent systems called utility models which are similar to the innovation patent and carry numerous benefits for start-ups and SMEs. Utility models are generally inexpensive and require no substantive examination to register, however to enforce a utility model, a substantive examination must be undertaken. Beneficially, the patentability standard is lower for utility models, thereby increasing the likelihood of success.

A number of Australia’s major trading partners provide utility model systems, including:

• China
• Japan
• South Korea
• Malaysia
• Thailand

Additional jurisdictions include:

• Spain
• Germany
• Austria
• Russia
• Denmark
• Brazil

A summary of the utility model systems in these jurisdictions is provided at the conclusion.

Utility models may be filed in either of three ways

1. Directly into the jurisdiction as a first or “Non-Convention” filing.
2. Directly into the jurisdiction based on another patent or utility model filed elsewhere within 12 months or “Convention” filing.
3. As a national phase entry from a PCT application (not available for all jurisdictions).

Some jurisdictions also allow for the conversion of a standard patent application to a utility model application and vice versa as well as a dual filing strategy, where a standard patent application may be filed alongside a utility model application.

Benefits of utility model prosecution

Utility models are easier to register than standard patents due to either the lack of an inventive step requirement, or a lower standard for inventive step. Generally if the claims of a utility model are novel over the prior art, there is a strong case to be made for the patentability of the utility model.

With this lower standard for patentability comes the power of a utility model in that it is more difficult to invalidate than a standard patent. The trade-off is a reduced term of protection, usually 10 years, compared to 20 years for a standard patent. Some jurisdictions do not require any substantive examination for a utility model to be enforceable, with examination only occurring if a dispute arises.

Strategies for filing utility models

Filing a utility model based on a standard patent application

Generally it is recommended that an Australian standard patent application is first filed to establish a priority date.

Using the Australian priority application, convention utility model applications may be filed optionally with standard applications in jurisdictions such as Europe and the US. In the meantime, the Australian patent application will be pending and examination need only be requested once the invention has proven to be commercially successful or in response to a direction to request examination.

Filing a utility model as a national phase entry of a PCT application

Alternatively, a PCT application may be filed in the first instance to delay costs and preserve options for future jurisdictions for 30 months. Since many jurisdictions allow for utility models to be filed at the national phase, an applicant could elect a mixture of utility model filings for less relevant jurisdictions and standard patent filings for more relevant jurisdictions or where utility models are unavailable. Further, even if a proposed strategy is to enter the national phase with standard applications only, this strategy can easily shift to utility model filings if, for example, a close prior art document is cited during the International phase. Such an example showcases the flexibility that utility models afford as part of an IP strategy.

While the PCT application is pending, a potential infringer may be detected in a particular jurisdiction. Instead of entering the national phase with a standard application, the national phase may be entered with a utility model in order to more quickly obtain an enforceable right.

Many jurisdictions also allow for conversion of a utility model to a standard application and vice versa. Thus, if it is apparent that prior art will preclude a standard patent, a standard application may be converted to a utility model application. Similarly, if it is apparent that a utility model application would qualify for a standard patent, the utility model application may be converted to a standard patent application. In this latter scenario, 20 years of protection would be achieved as compared with the more usual 10 years for a utility model.

Dual filing of a standard patent application with a utility model

Dual filing of both a standard patent application and a utility model is also an option if quick protection is sought to stop a potential infringer while the standard application remains pending. This strategy also has the benefit of providing the option of continuing only with the utility model application if patentability of the standard application is at risk. China is one jurisdiction that is particularly attractive for this option since conversions between utility models and standard patents is not allowed. To benefit from this option, both applications must be filed directly into China on the same day.

Key takeaways of the utility model system

• Though there is no longer an option for start-ups and SMEs to obtain quick, enforceable protection in Australia, utility models bring significant time and cost savings for foreign filings, while an Australian standard application remains pending and ready to be pursued in the future.
• Overall, utility models provide start-ups and SMEs with the power of choice and should always be considered when devising an IP strategy.

Summary of systems for commonly requested jurisdictions

Jurisdiction	Term (years)	Available for national phase entry	Substantive examination required for registration	Conversion from/to standard application	Renewal fee due date
China	10	Yes	No	No	Filing date, payable after grant annually
Japan	10	Yes	No	Yes	Registration date, annually
South Korea	10	Yes	No	Yes	Registration date, 3 years due up-front, then annually starting from 4th anniversary of registration date
Malaysia	20	No	Yes	Yes	Registration date, annually
Thailand	10	Yes	No	Yes	Registration date, annually
Spain	10	Yes	No	Yes	End of filing date month after registration, annually
Germany	10	Yes	No	Yes	3, 6 and 8 years from end of filing date month
Austria	10	Yes	Yes, unless expedited proceedings requested	Yes	End of filing date month from 1st anniversary, annually
Russia	10	Yes	Yes	Yes	Filing date after registration, annually
Denmark	10	Yes	No	Yes	3 and 6 years from filing date
Brazil	15	Yes	Yes	Yes	3rd anniversary of filing date, annually