New ACIP issue paper on a 'Review of the Innovation Patent System'

In recent years, the Advisory Council on Intellectual Property (ACIP) has been conducting a number of reviews and issued corresponding papers on IP reform in Australia.

On 17 August 2011, ACIP issued a paper calling for submissions on its next review concerning the Innovation Patent system.

The closing date for submissions for review is 14 October 2011.

The Innovation patent system is a unique system in the global IP arena.

At its heart, the innovation patent system offers a second-tier patent enforcement regime to the standard patent system. The innovation patent requires the satisfaction of an 'innovation step' test, which is considered and intended to be a lower threshold than the 'inventive step' test required for a standard patent. The trade-off for this lower threshold test being that the maximum term of an innovation patent is less than that for a standard patent – 8 years as opposed to 20 years. However, there have been criticisms that, while for a shorter term, the innovation patent offers the same level of infringement enforcement as a standard patent, although is much harder to counter due to its lower validity threshold requirements.

The innovation patent has been criticised as being overly generous to patent owners and open to abuse. The innovation patent is much more encompassing in terms of what subject matter it can provide patent protection for when compared with other second-tier patent mechanisms offered in some other countries (notably utility models provided in Germany, China, Japan and Korea).

The innovation patent can also offer a quick enforcement strategy while a parallel standard patent application is pending, due to the quick turnaround times offered for the progress of innovation patents by IP Australia. Such strategic uses may not have been originally intended and foreseen, however the system has been exposed to quite valid strategic uses in this regard.

The review paper is being expansive enough to ask radical questions such as whether a second-tier patent system in Australia is still required and, if so, should a utility model system, as used elsewhere, be adopted. 

Realistically, we are unlikely to see reform of such magnitude occur.

In the current Australian patent climate, the standard patent system is on the verge of significant legislative reform to 'raise the bar'. This would potentially further the validity threshold gap between the innovation patent system and the standard patent system.

The ACIP paper does propose amendments to raise the bar of the innovation patent system to close the perceived gap which will occur following the pending changes to the standard patent system. If anything, this is likely to be where the ACIP paper may be more likely to effect change.

by Simon Ellis

Biofuels - Something Happening Here

I attended the Biofuels Summit in Brisbane on 28-31 August 2011. I have to say it was an eye-opener as to the breadth and depth of both the R&D and commercialisation work that I going on in Australia and the rest of the world in the biofuels area.

The ‘face’ of biofuels over the last few years has been the fermentation of bio-ethanol from cereal (food) sources. However, because of the ‘food vs fuel’ debate on land use, this has moved on to new and interesting technology fields – sometimes called ‘second generation’ biofuels.

While I was struck by the inroads bio-fuels have already made into the automotive fuel chain, it seems that the level of use of biofuels could be a lot higher than it is. There were a number of perceptions that are holding back biofuels at the moment, including apparently limited refuelling facilities, the perceived risk of voided engine warranties, compromised emissions rating, limited fuel tank (range) capacity, need for engine modifications, need for mechanic training. These are some of the perceptual challenges for the biofuel industry.

The solution in Brazil is to make it illegal to sell any car that cannot run on ethanol!

Nevertheless, some transport companies are embracing biofuels. Finemores Transport are using biodiesel from Biodiesel Producers P/L in Wodonga, who use tallow as a feedstock. They have used more than 20 million litres of B20 biodiesel since 2008 without problems.

Boeing are working on sustainable biofuels from non-food sources to replace fossil jet fuels.

The Summit showcased a number of companies that have some interesting technologies in development:

• Lanzatech are a New Zealand based technology company who have developed a technology to convert steel-making waste gas to biofuel. They have a Chinese joint venture planning to make >30 million gallons of ethanol per yr by 2013. Not surprisingly, the see their patent and IP portfolio as a key strength.
• Zeachem is a US based biomass processor using biochemical treatment to produce ethanol, which is based on the digestive organisms of termites.
• Licella is an Australian company using a new technology to produce high energy density bio-crude in one pass. They are working with Norske Skog to build the largest pilot facility in the Southern Hemisphere to process biomass to biofuels.
• Aurora Algae are based in WA and were founded at UC Berkeley. They have a pilot facility near Karratha WA for harvesting biofuels from algae, while simultaneously producing dietary Omega-3 EPA fatty acids. To date, they have filed 39 patents in low cost cultivation/harvesting/extraction/conversion of algae biofuels.
• Microbiogen are using their expertise in yeast to create technology for making sustainable next generation biofuels. They have developed a yeast strain that can metabolize xylose, previously thought to be impossible. Microbiogen argue that even second generation biofuels will still ‘crowd out’ food production. Their technology can allow this to be avoided.

Interestingly (ominously) there were a couple of representatives from the Australian Consumer and Competition Commission (ACCC) attending the summit. They told me they always take an interest in emerging markets, and the biofuel industry is certainly emerging!

by Adam Hyland

A reduction in Red Tape - Business Name Registration Changes

Business name registration is a necessary evil if you operate in Australia as a business under anything than a personal or company name. If you trade as a trust, a partnership, or just want to operate under another name, then you must register a business name.

The idea of the system is to ensure that customers, suppliers and the public at large can identify the entities which are trading. It is important to understand that registering a business name does not create any rights in the name registered – for that, you would need to register a trade mark with IP Australia. The process is fairly simple in most cases, and the fees (while never welcome) are not excessive.

The big problem arises when a business wants to operate in several locations within Australia. Each state and territory has a separate system. In most cases, you are also required to have a local business address specified. In the era of internet based sales, it is not always easy to tell if you are trading in a particular state or territory. What is a reasonable system for one state becomes an messy and expensive exercise when you are required to register in six states and two territories.

Another complication is that the system currently operates independently of the Australian Business Number (ABN) system, which is required for tax, GST and related purposes.

Following from a decision at COAG (Council of Australian Governments, including Federal, State and Territories), a bill has been introduced into the Federal Parliament to create a single national business name system. States will refer their powers to the Commonwealth, and ASIC will operate a single, on-line system. Existing names will be grandfathered, with provisions to deal with the co-existence of (e.g.) ‘Beachside Fish & Chips’ in multiple states.

Also, the system will require that an ABN be provided for each registration, so that the business name and ABN systems are aligned.

It will take all the states to pass their corresponding legislation before the new scheme is in operation, so it is likely to be a year or two away. The outcome should be a much more efficient, on-line, one stop national business name system, which will simplify requirements for anyone in or starting a new business.

by Peter Franke