Marcus Caulfield, Partner and Marianne Repacholi, Associate at FB Rice, continue the FB Rice series into patents. In Part 3, they discuss various methods available to challenge the validity of a patent in Australia, as an offensive IP protection strategy is often key for many organisations.
Many organisations underpin their growth strategies via the commercialisation of research and development programs. A key component to the success of this strategy is a comprehensive IP portfolio that protects this investment in R&D while maximising return commercialisation of new products and technologies.
A key strategy for many organisations is also a strong offensive program of IP protection. It is important to know how and on what basis a competing patent can be challenged.
How and when can the rights of a patent be challenged?
The validity of an Australian patent or patent application may be challenged by:
- re-examination: any time after acceptance of the patent
- opposition proceedings: within three months of the advertisement of the acceptance of the patent
- revocation proceedings: once a patent has been granted.
Re-examination
Re-examination is relatively inexpensive and a potentially effective option for challenging the validity of an Australian patent application or patent. In situations where the patent has granted and a requestor has filed a re-examination request, the Commissioner must re-examine the patent. Alternatively, a request for re-examination filed on a patent application between acceptance and grant may be re-examined at the Commissioner’s discretion.
Changes to the Australian Patents Act in 2013 expanded the grounds available for re-examination making it a valuable tool for challenging the validity of a patent and may include any one or more of the following:
- novelty (including prior use)
- inventive step
- manner of manufacture (patent eligible subject matter)
- utility
- clarity
- enablement
- best method
A requestor can request re-examination of a patent application or granted patent by outlining the grounds of invalidity and filing any relevant evidence, which may also include expert evidence. Requesting re-examination will not affect the right of the requestor to apply to revoke the patent at a later date if the re-examination challenge is unsuccessful. However, unlike patent oppositions and revocation proceedings, the re-examination process is ex parte, which means the patentee and the requestor each communicate separately with the patent office and there is no opportunity for the requestor to file further iterations of evidence once the request has been filed.
On re-examining the patent or patent application, the examiner will issue an examination report providing the patentee with the opportunity to file written submissions and/or claim amendments, which may ultimately result in the patent being maintained unamended, amended or refused.
Oppositions
It is possible to oppose the grant of an Australian patent for up to three months from the advertisement of acceptance for standard patent applications and at any time after certification for an innovation patent.
Opposition proceedings are initiated by an opponent filing a Notice of Opposition with the patent office. It is not necessary to identify the true opponent and an opposition can be filed using a “strawman” as the opponent. If a strawman is used, it is advisable to ensure that the right of appeal remains with the true opponent.
Subsequent to filing the Notice of Opposition, the opponent is required to file a Statement of Grounds and Particulars (SGP) which sets out the grounds it intends to rely on to establish the opposition, and the facts and circumstances (the particulars) forming the basis for the grounds.[1] Possible grounds may include any one or more of:
- manner of manufacture (patent-ineligible subject matter)
- entitlement
- novelty
- inventive step
- utility
- secret use
- clarity
- enablement
- best method
After having stated the grounds of opposition, three evidentiary stages follow and include:
- evidence in support prepared by the opponent – due within three months of filing the SGP
- evidence in answer prepared by the applicant – due within three months of the opponent having filed their evidence in support
- evidence in reply prepared by the opponent – due within two months of the applicant filing their evidence in answer.
The time limits for each evidentiary stage are strictly enforced and can only be extended at the discretion of the Commissioner.[2]
Following the evidentiary stages, the opponent must file a summary of submissions at least 10 business days before the hearing and the applicant must file a summary of submissions at least five business days before the hearing.[3] The hearing is conducted before a delegate of the Commissioner, the purpose of which is to provide an opportunity for the opponent and the applicant to argue their case.
After the hearing, the delegate of the Commissioner will issue a written decision and award costs to the successful party.[4] The parties have 21 days from the date of the decision issuing to file an appeal to the Federal Court of Australia.
Following the patent office decision, an appeal process is available in which new evidence may be presented by either party, and may provide advantages including delaying the grant of the patent without the added complexity of infringement proceedings or an injunction, until at least the appeal is concluded.
Opposition proceedings can be a powerful strategic tool to force the applicant to narrow their claim scope to exclude any potentially infringing commercial product(s) or indeed encourage settlement negotiations. Before filing an opposition, the opponent needs to consider the costs involved, prospects of success, relationship between the patent applicant and the potential opponent, and commercial impact if the patent was to proceed to grant.
Revocation proceedings
Proceedings for a revocation are commenced by an applicant filing an application and statement of claim with the Federal Court of Australia or, alternatively, seeking revocation of granted claims during infringement proceedings commenced by the patentee.
The applicant’s statement of claim (pleadings) will set out each allegation of fact relied upon by the applicant. A defence is filed by the respondent, to which the applicant may file a reply.
Once pleadings are closed, the parties may apply for discovery of documents. Similar to the opposition evidentiary stages, evidence occurs in three stages. The applicant will file their evidence in chief, which is followed by the respondent’s evidence in answer, and finally evidence in reply filed by the applicant. The evidence will be in the form of affidavits provided by suitably qualified independent experts acting on behalf of the applicant and respondent. As is the case with opposition hearings, while the evidence provided by the expert is generally received as affidavits (or declarations), the experts may also be subject to cross-examination at the hearing.
The Federal Court may revoke a patent[5] on one or more of the following grounds:
- manner of manufacture (patent-ineligible subject matter)
- entitlement
- novelty
- inventive step
- utility
- secret use
- Fraud, False Suggestion or Misrepresentation
- enablement
- best method
Unlike opposition proceedings, the true interested party cannot remain anonymous in court proceedings.
Due to the high cost of revocation proceedings, it may be worth considering contacting the patentee before initiating court proceedings to negotiate a settlement, particularly if there are convincing grounds for invalidating the patent. In this way, the patentee may be persuaded to voluntarily amend the patent or grant a license.
To avoid revocation action, alternative defensive strategies that are worth considering include exploring design around options and/or investigating the option of acquiring a licence or partial licence to the patent.
Key takeaways on Australian patent rights
A number of options exist to challenge the validity of a patent in Australia, each providing their own unique advantages and disadvantages, and an organisation’s offensive IP protection strategy will depend on varying key decision factors.
- Re-examination is the least costly and the fastest option but the available grounds to challenge a patent are the narrowest and a requestor cannot participate in the process once the request is filed.
- Opposition proceedings are more costly than re-examination and typically less costly than revocation proceedings. In contrast to re-examination, an opposition allows both parties to file evidence of facts, which can be supported by expert opinion. On the other hand, the grounds of opposition are slightly less broad than those available for revocation proceedings because an opposition is a pre-grant proceeding and the Patent Office cannot determine if a patent has been granted as a result of fraud or false suggestion.
Revocation proceedings are costly and a long complex process, however, advantages include the availability of the broadest grounds of invalidity, and no limitation on prior art or evidence, including discovery of documents. The same standard of proof is applied for revocation proceedings as is applied for opposition proceedings, which is the ‘balance of probability’ test, however, strict laws of evidence apply, which do not apply for opposition or re-examination proceedings.
[1] Regulation 5.2 “Definitions”, Patent Regulations 1991
[2] Regulation 5.9, Patent Regulations 1991
[3] Regulation 5.20(4), Patent Regulations 1991
[4] Schedule 8, Patent Regulations 1991
[5] Section 138, Patents Act 1990 (Cth)
Marcus Caulfield is a partner in the FB Rice Melbourne chemistry team and leads the broader life science team. Marcus’s patent practice is principally in pharmaceutical and animal healthcare areas. He has extensive experience in securing patent protection for small molecules through to polymeric species. Marcus is relied upon for his expertise in the drafting and prosecution of patent applications; patent portfolio management; his extensive opposition experience in Australia and New Zealand; and his technical abilities in litigation support. Connect with Marcus via email or LinkedIn 
Marianne Repacholi is an associate in the FB Rice Melbourne chemistry team. With extensive experience in patent drafting, global prosecution of Australian originating research for local and overseas organisations, and patent portfolio management, Marianne intuitively operationalises client objectives to enhance their capacity to leverage intellectual property assets across key international markets. Connect with Marianne via email or LinkedIn
