The Australian innovation patent has been granted a second chance, with the recently introduced Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2018 (“the Bill”) being absent of the previously proposed amendments that would see the innovation patent abolished.

Draft legislation released for comment in October 2017 included provisions that would have seen an end to the innovation patent. This came after years of review of the innovation patent system, with an IP Australia Economic Research Paper being issued in 2015 that recommended abolishment of the system. The recommendation came amid fears that the system was being abused by foreign entities, while not succeeding in its object of stimulating innovation by Australian businesses and organisations. Instead, the system was accused of stifling innovation by providing an unacceptably low barrier to achieving patent protection.

Unsurprisingly, the move to put an end to the innovation patent system raised concerns with respect to how such a change would affect local small and medium sized enterprises (SMEs), which often rely on the easier access to patent protection that the second-tier patent system affords them. A number of submissions were filed in response to the recommendation, arguing that the system should be retained, as it was, in fact, achieving its purpose in assisting local SMEs with obtaining patent protection, thus stimulating innovation and providing a positive economic impact.

While the recent Bill does not include provisions for phasing out the innovation patent system, it is unlikely that this will put an end to the calls for reform. It may be that, instead of abolishing the system completely, some amendments may be introduced to increase the standard of innovation patents, such as by increasing the threshold for the level of innovation required for validity. Amendments to the law seem particularly likely given that the Department of Industry, Innovation and Science recently opened a consultation with SMEs, inviting them to file submissions with respect to how they manage and exploit their intellectual capital to better help them access the intellectual property system. The deadline for such submissions has been set to 3 August 2018. Whether and what further action will be taken by the government with respect to the innovation patent system based on any such submissions remains to be seen.

In the meantime, SMEs and other users of the innovation patent system can breathe a sigh of relief and continue to make the most of the second-tier system.