4 Tips Businesses Should Consider Before Applying for a Patent

In Short

• Understand the requirements for an inventive or innovative step before applying for a patent.

• Ensure your invention passes the “manner of new manufacture” test and does not involve secret use.

• Be clear on who is entitled to apply for the patent, especially in cases of joint inventions or employer-employee inventions.

Tips for Businesses

Before applying for a patent, confirm your invention meets the necessary inventive or innovative criteria and passes the “manner of new manufacture” test. Avoid secret use that could compromise novelty, and ensure that the right person or entity applies for the patent. Consult a lawyer to guide you through the process.

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Table of Contents

• 1. The Requirement for an Inventive or Innovative Step
• 2. The Manner of New Manufacture Test  
• 3. Secret Use
• 4. Persons Entitled to be Granted a Patent Application
• Key Takeaways
• Frequently Asked Questions

Patents are legally enforceable rights over a substance, method, device or process which is new, useful, inventive or innovative. A patent provides a patentee the legal right to stop others from using their patented process or producing their patented goods by suing for infringement. Patents can cover new products or enhancements to pre-existing products. If you are considering applying for a patent, it is helpful first to understand the criteria you must satisfy under the Patents Act 1990 (Cth) (Patents Act). This article summarises four key points businesses should consider before applying for a patent in Australia.

1. The Requirement for an Inventive or Innovative Step

Under Australian law, there are two types of patents:

1. Standard patents; and
2. Innovation patents.

A standard patent application must demonstrate an inventive step, whereas an innovation patent must demonstrate an innovative step. A patent will involve an inventive step if it would not have been obvious to a skilled person in the relevant area, having regard to the knowledge which existed at the time of the invention. On the other hand, an innovation patent is taken to involve an innovative step unless the invention varies from prior art in a way that makes no substantial contribution to the working of the invention (Section 7(4) of the Patents Act). There is also a difference in the term of protection between a standard and innovation patent. Standard patents provide protection for 20 years compared to eight years for innovation patents.   

2. The Manner of New Manufacture Test  

For both a standard and innovative patent, the invention must be a manner of new manufacture under Section 6 of the Statute of Monopolies 1624. This means that the invention must belong to the ‘useful arts’ and not merely be relevant to the ‘fine arts’. In the leading High Court decision of National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252, ‘useful arts’ was defined as something that provides a material advantage and value in the field of economic endeavour. The courts have recognised a number of subject matters which will fail to satisfy the manner of new manufacture test. These include discoveries, scientific theories, laws of nature or ideas.

3. Secret Use

For a patent application to be successful, the invention must be novel and distinguishable from “prior art”. Consequently, using a patent before a priority date can be fatal for an application because a company is effectively extending their period of exclusivity. It’s then important to understand what constitutes “use”. Section 24(1)(a) of the Patents Act provides that it is acceptable to use the patent if it is for the purpose of reasonable trial or experiments which leads to the invention. As such, this will not compromise the criteria of novelty. Section 9 of the Patents Act sets out additional circumstances which are not considered as secret use, including:

• Use which occurs in the course of confidential disclosure of the invention; and
• Use or disclosure by or on behalf of the Commonwealth where there is a requirement for disclosure.   

However, demonstration of a patent at a trade fair will destroy its novelty and will, therefore, be categorised as “prior art”. Similarly, commercialisation of a patent regardless of strict confidentiality measures will still constitute secret use.

4. Persons Entitled to be Granted a Patent Application

Under section 15 of the Patents Act, a person (whether or not an Australian citizen) can be granted a patent provided they meet the following requirements: 

• They are the inventor; or
• They would, on the grant of a patent, be entitled to have the patent assigned to them; or
• They derive title to the invention from the inventor or from the person who is entitled to have the patent assigned to them; or
• They are the legal representative of the deceased person in the categories mentioned above.

An employer can be entitled to have the patent assigned to them where the inventor had been employed under an employment agreement. Here, general principles of employment law apply and will involve looking at the relationship and determining whether the scope of work included the task of invention. Section 31 of the Patents Act also recognises that two or more people can make a joint application for a patent.

Key Takeaways

Applying for a patent is an imperative step to safeguard a company’s intellectual property. A patent protects a company’s ideas and innovations from copycats and can assist generate an optimal return on a company’s R&D expenditures. Before applying for a patent, it is helpful to consider the following questions:

1. Does my invention fall within a standard or innovation patent?
2. Does my invention meet the manner of a new manufacture test?
3. Have I secretly used my invention?
4. Am I a person entitled to make a patent application?

Frequently Asked Questions

What is the difference between a standard patent and an innovation patent?

A standard patent requires an inventive step and offers protection for 20 years, while an innovation patent requires a lower threshold of inventiveness and provides protection for 8 years.

What is the “manner of new manufacture” test?

This test ensures that the invention belongs to the ‘useful arts’ and provides a material advantage in economic endeavour, not just in the fine arts. Discoveries or scientific theories do not meet this criterion.