For an invention to be eligible for patent protection, it must be considered new internationally. As patents are only enforceable within their territory, if an individual or entity overseas has a patent for a similar invention to yours, IP Australia is unlikely to grant protection for a patent. This article sets out how you can overcome this difficulty to still market your product.

What is a Patent?

A patent is a legally enforceable right for a device, substance, method or process that you have invented. The patent owner has an exclusive right to exploit the invention for a specified time depending on the type of patent. For example, in Australia, the standard patent monopoly is for 20 years, and seven years for an innovation patent. An applicant must first prove that their invention is:

  • New;
  • Useful; and
  • Inventive or Innovative. 

The Patent Co-Operation Treaty

While national governments issue patents enforceable in their territory only, many countries are signatories to the Patent Co-Operation Treaty (PCT). Australia became a signatory to the PCT in 1980. At present, nearly 150 states have contracted to the PCT. The World Intellectual Property Organisation administers and monitors the agreement.

The PCT is an international agreement that enables an individual or entity to file one application that has the same effect as filing a separate application in each of the signatory countries. That application is submitted to the appropriate domestic government authority. However, the decision of whether or not to grant a patent for an invention remains with the appropriate national authority tasked with issuing them, and they will act according to the patent law of their particular jurisdiction. In Australia, that body is IP Australia, and the law is the Patents Act 1990 (Cth) and regulations.

Applying for a patent under the PCT involves two phases:

  • The international phase; and 
  • The national phase. 

Once you have established the patent’s priority date in each market (the international phase), you will then need to proceed to request that each national body assess the patent (the national phase). To move to the national phase, you will need to provide translations of the patent in the relevant language of the national body where you are seeking an assessment.

You do not need to enter the national phase in each country. This allows people to apply for patent protection only in those markets where they wish to commercialise their product. The advantage of this system is that it allows people to avoid the costs of getting translations done and paying filing fees to each national patent body (or the group that oversees a range of countries, such as the European Patent Office).

Prior Art Base

It will usually be difficult to obtain a patent in Australia if there is a foreign patent for the same invention. This is because IP Australia’s examiners could consider that foreign patent when determining whether the invention claimed is new (novel) and includes an inventive step (or innovative step).

Regardless of whether the inventor applied for an overseas patent under the PCT, that overseas patent will still form part of the “prior art base” that IP Australia considers when determining whether to grant a patent. Prior art information refers to:

  • Information publicly available in a document or through doing an act both in Australia and overseas; and
  • Information contained in a published specification filed in respect of a complete application.  

The criteria for establishing the novelty of an invention are such that your Australian application for a patent is unlikely to succeed because the invention is not novel and exists elsewhere, even though the pre-existing foreign patent is not enforceable in Australia.

Furthermore, even if IP Australia determines that the invention is patentable in Australia, it would be open to other interested parties to oppose the grant of the patent on the grounds set out above. If those oppositions are unsuccessful, it would still be open to a party to challenge IP Australia’s ruling in the Federal Court, seeking to have the patent invalidated.

Commercial Agreement

However, even if you are not able to obtain patent protection for your invention in Australia, you could still sell or commercialise your invention in countries where no patent exists. You may even be able to market your invention in any market in which the overseas patent is enforceable, provided you can come to a commercial agreement with the owner of the patent.

It is open to you to make a commercial agreement with the owner of the patent that will permit you to market your product. The patent owner can grant you a licence that means you can exploit the invention the patent protects. Generally, these agreements are negotiated on the basis that you would provide the patent owner with fees or royalties over the entire term of the licence for using the patent. For example, you could negotiate a payment of a percentage of your annual profits.

If you do make an agreement to exploit the existing patent, it is essential that the agreement is in writing and details where you can market your product, the terms on which you are permitted to market the product, and the fees or payments to be made. These kinds of agreements are complicated, and you will likely need professional assistance to draft one that is tailored to your circumstances.

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If you have any questions about how to protect your intellectual property or need assistance filing a patent application, get in touch with our IP lawyers on 1300 544 755.

James Gonczi

Next Steps

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