Improving access to patents for business

What you need to know

• The Australian Government's Patents Accessibility Review has made 16 recommendations to improve the use of the patent system by small and medium enterprises.

What you need to do

• Remember to consider your business' intellectual property (IP) strategy within an overall commercial strategy.
• Learn about IP, what it is, how it can be protected, how to leverage it, and audit what you have.
• Stay up to date with any future reforms to the Australian IP protection systems.

A review of the IP system

History of reform

In 2015, the Australian Government asked the Productivity Commission to undertake a 12 month public inquiry into Australia's intellectual property system. The Productivity Commission's final report made a number of recommendations, including recommending that the Government abolish the innovation patent system and as a result the innovation patent system is now being phased out. In supporting this recommendation the Government made a number of additional comments noting its intention to stimulate innovation among Australian small to medium sized enterprises (SMEs) and that it would continue to explore more direct mechanisms to better assist SMEs to understand and leverage their IP.

Accordingly, in 2020 the Government commissioned a review of the accessibility of the patent system for SMEs. This independent review involved desktop research, conducting a series of interviews with the SME community, academic experts, lawyers, patent attorneys and judges and reviewing public submissions received.

Findings of the report

The final report, delivered in May 2021, found that Australian SMEs broadly do not utilise the patent system. A similar trend was found to exist for SMEs globally. The report sought to understand the SME experience within the Australian patent system, in order to analyse how best it might be improved.
The final 16 recommendations can be understood by reference to the following three key themes.

The export of intellectual property

The review demonstrated that the avoidance of the IP system hinders Australia's export capacity. It flagged that intellectual property was key to the federal government's Modern Manufacturing Initiative. The initiative is a flagship policy of the Government's pandemic recovery efforts, which seeks to help Australian manufacturers in IP intensive areas to scale up, collaborate and commercialise.

The need for the Government to better assist SMEs with understanding the value of their IP

IP Australia has a considerable toolkit, available online, to assist in developing an understanding of IP rights. It includes education programs and patent resources especially designed for SMEs. However, the report found little community awareness of such outreach programs.

This issue is compounded by inventor-generated difficulties that stem from a lack of understanding of the process of commercialisation including naivety about the difficulties associated with developing revenue streams from inventions.

A number of recommendations suggest ways in which awareness and education of IP rights can be improved.

The fear of litigation

The report emphasised that SMEs are wary of and would rather avoid using the patent system for fear of being involved in "mega-litigation". Here it was suggested professional advice added a great deal of value, from ensuring patent applications are adequately drafted at the outset to obtaining relevant commercialisation advice.

The review made certain recommendations to further the accessibility of the Australian IP system and strengthen smaller business' confidence in enforcing their patents at a reasonable cost. For example, the following reforms were recommended:

•  the FCA to provide a specialised and expedited stream for smaller patent disputes (rec 9) noting there is already an option for determination of other kinds of IP disputes in the Federal Circuit Court;
• appeals of patent oppositions to be limited to the facts and grounds available to the Commissioner of Patents, with new grounds only admitted with leave of the Court (rec 10);
• IP Australia to set up a non-binding and cost-effective expert opinion service (rec 11); and
• IP Australia to set up an arbitration service designed to settle disputes quickly and at low cost (rec 12).

Where to now?

SMEs are said to make up 99 per cent of all Australian businesses. It is in Australia's economic interests to strengthen SMEs' use of the IP system.

If implemented, a number of these recommendations will change how patent rights are protected and enforced in Australia. The Government is now carefully considering the recommendations made and we expect further consultation will occur in the event these recommendations are implemented.

Nevertheless, SMEs should continue to seek expert advice to best consider their IP position and develop IP protection, enforcement and commercialisation strategies alongside any other aspect of their businesses.

The full version of the report is available here.

Authors: Nikkie Xu, Lawyer; and Kellech Smith, Partner