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Thursday, 16 May 1968

Mr BOWEN (Parramatta) (AttorneyGeneral) - I move:

That the Bill be now read a second time.

It may be recalled that in November of last year I introduced into the House a Patents Bill similar to the present Bill. In introducing the Bill, I made reference to the fact that the Bill bad largely resulted from the recommendations of a small committee which had been set up by my predecessor and of which I was the Chairman. The Committee included representatives of the Bar, the Institute of Patent Attorneys and industry. I also said that the changes proposed by the Bill were of considerable interest to patent attorneys, to industry generally and to other sections of the community and that it was intended the Bill should lie over until the present session of Parliament so that the changes might be studied by interested groups. Since then the Bill has disappeared from the notice paper and it has become necessary to introduce a new Bill. The present Bill, while being substantially the same as the previous Bill, includes certain changes made as a result of representations which I have received.

I do not propose to traverse in detail all of the matters I dealt with in my speech last November. Nevertheless, it may assist the House if I mention again in general terms the nature and purpose of the main amendments made by the Bill and explain in a little more detail the reasons for one or two of the new matters that have been included. Honourable members may recall that the principal reason for making the changes to the present patent legislation is the need to mitigate a serious problem that has been developing with regard to arrears of unexamined patent applications in the Patent Office.

Under the present Act an application must be examined If a complete specification is lodged in respect of it. The proportions of the problem confronting the Patent Office may be seen from the numbers of complete specifications received and on hand. In 1939, 3,360 complete specifications were received; in 1950 there were 4,723 - a substantial increase in the rate but nothing by comparison with the increases in succeeding years; in 1960 there were 9,250 and last year, that is in 1967, there were 13,255. Despite the best efforts of the Commissioner of Patents to recruit and retain staff and to maintain efficiency in the operations of the Patent Office, the numbers of unexamined applications had risen from 12,456 at the end of 1960 to 41,500 at the time I introduced the Bill last November. They have now risen to a figure in excess of 44,800. The present arrears alone represent more than 4i years work by the present staff of the Patent Office.

As I mentioned last November, the Australian Patent Office is not alone in its difficulties; practically all patent offices that have an examination system are troubled by mounting arrears of work. The growth in the number of patent applications is caused not only by an increase in the number of inventions for which patent protection is sought but by the practice of seeking protection for an invention in more countries than previously. I will give some figures at a later stage which will show that the majority of applications received in the Australian Patent Office emanate from outside Australia. This is the result of increasing trade and increasing transfers of technology to this country. The very great increase in patent applications in Australia is, in fact, a measure of the growing industrial development of the country.

Let me now deal broadly with the changes that are proposed. As I have mentioned, an application must be examined if a complete specification is lodged defining the invention for which patent protection is sought. An examination in accordance with the Act involves a consideration of the specification from a number of viewpoints by an examiner on the Patent Office staff. The examiner reports whether the application and complete specification comply with the requirements of the Act. His report is sent to the applicant or his patent attorney. In the majority of cases, amendment of the specification is required to meet the matters raised in the report. There may be correspondence with the applicant or his patent attorney and further reports by the examiner before the specification is in order for acceptance. Altogether, the examination of each application involves a considerable amount of work.

The first change proposed is to the present procedure whereby every application and complete specification comes up for examination. A new procedure is to be introduced under which an application will not be examined unless the applicant specifically requests examination. An applicant will have 5 years from the date of lodging the complete specification to decide whether he wishes to proceed with his application. If he does not ask that it be examined in that time, the application will lapse. This procedure will alford an applicant opportunity to assess the value of his invention from time to time in the period up to the examination stage and decide whether it is commercially worthwhile to proceed wilh his application. In this regard honourable members will bear in mind that a patent application is generally made at a time when the commercial value of the invention is still largely a matter of speculation. In the nature of things the initial expectation of the inventor is not realised in every case. If a number of applicants decide not to proceed with their applications, there will be a saving in the work of the Patent Office. The system of deferred examination has been adopted or is under consideration in Holland, the Federal Republic of Germany and the United States of America. The system is also provided for in the draft patent law that has been prepared for the European Common Market countries.

Before passing from this aspect of the Bill there are two differences in these provisions compared with the 1967 Bill that I think I should mention. In the first place new section 57 has been redrawn so that the identity of a person who gives notice to the Commissioner of matters affecting the validity of a claim will not be disclosed to the applicant. This change was sought by the Institute of Patent Attorneys because it was thought that a person might alert a competitor to his interest in a particular field if it were known that he had challenged a claim in his competitor's patent specification in this way. Secondly, section 54c will be amended so that a patentee cannot sue for infringement in respect of an act done before his patent is sealed unless it would fall within the scope of both a claim of the complete specification as it stood at the time the act was done and a claim included in the specification of the patent as granted.

I turn now to the second change in procedure made by the Bill. This change is the introduction of a procedure of modified examination and is made by clause 14 of the Bill. Very broadly the system seeks to reduce the amount of work required of examiners in certain cases by relying on the examination of equivalent specifications by the Patent Offices of certain prescribed overseas countries. The countries which will be prescribed are the United Kingdom and the United States of America. These countries have been chosen because their requirements as to patent specifications are so like our own that a specification meeting the requirements of these countries may be regarded as sufficiently meeting our requirements.

Honourable members will recall that I mentioned earlier in my speech that a large proportion of applications are received from overseas applicants. In 1967 approximately 88% of all complete specifications were received from overseas. Of even greater significance in view of the proposed introduction of the modified examination procedure is the fact that approximately 60% of all complete specifications originated either in the United Kingdom or in the United States of America, the two countries that are to be prescribed. Also, in the case of many applications that originated in other overseas countries, there would have been equivalent applications lodged in the United Kingdom or in the United States of America.

I would make it clear to the House, nevertheless, that it will be a matter for the applicant to decide whether his application is to be dealt with under the system of modified examination or under the ordinary system of full examination. In order to avail himself of the modified examination procedure, the applicant must amend his Australian specification to make it the same, except as to matters of form, as the specification of a patent granted in the United Kingdom or in the United States of America in respect of the equivalent application. It is thought that it will still be necessary for the Australian examiner to make some of the search that he would make if he were conducting a full examination. The extent of the search required will vary according to a number of circumstances. It is not possible to provide in the Bill for all the contingencies that will arise, and, accordingly, it is provided in subsections (3.) and (4.) of proposed new section 52b that the extent of the search to be made by the Examiner under modified examination should be prescribed by regulation.

In some respects, these proposals anticipate likely international developments. Consideration is being given at an international level by member countries of the Paris Convention for the Protection of Industrial Property to a scheme to avoid the duplication of work that occurs where applications in respect of the same invention are lodged in several countries. Last October Australia was represented at a meeting of a Committee of Experts in Geneva which was engaged in the preparation of a Draft Patent Co-operation Treaty. Although the discussions in that Committee indicated that anything in the nature of an international patent application valid in a group of participating countries is very much a matter for the future, these discussions are continuing this year and Australia will continue to participate in them. The scheme proposed in this Bill is, nevertheless, in keeping with what could well be the outcome of these discussions.

The present Bill would extend the scope of the amendments which an applicant may make during the course of examination. Honourable members will see from subsection (4.) of the new section 49 that an amendment of a specification is now possible so long as the specification does not, as a result of the amendment, claim matter not in substance disclosed in the specification as lodged. I want to explain the reason for this change in some detail, because it may be thought by some that an important safeguard to third parties will thereby be removed from our law. lt is part of the function of the complete specification to define the scope of the monopoly sought by the applicant. This is done in a series of paragraphs appended to the specification which are called claims. The function of a claim was once aptly described by Mr Justice Maugham in the case of Marconi's Wireless Telegraph Co. Ltd v. Philips Lamps Ltd as being like a miner's claim. His words are worth quoting. He said: lt is not sufficient for the inventor to discover his gold mine: he must also peg out his claim. Outside the pegs, the gold, if it be there, is free to all.

The Patents Act at present prescribes two relevant limits on an applicant's freedom to amend his specification following an adverse report by the examiner. The first limit is that the applicant cannot amend so that his specification would claim matter not in substance disclosed in the specification as lodged. That is, he cannot claim an invention which he did not disclose to the Patent Office when he lodged his specification. Secondly, he cannot amend his specification so that it would claim' matters which did not fall within the scope of the claims before amendment. That is, he cannot subsequently lay claim to matters that he did not previously claim. It was thought that this second limitation would be of value to third parties; by looking at the claim they would know the outer limits of the prohibited territory under the patent which might be granted.

It has been decided to abandon this second limitation. That decision has been taken for two reasons. In the first place, it has been found in practice that it serves no effective purpose in many cases, lt has become a fairly common practice for draftsmen of specifications to include a claim that virtually covers the whole of the matter described in the specification. The applicant is thus subsequently able to contend that any amendment he may make which satisfies the first limitation about disclosure also satisfies the second. If the second limitation can be defeated in this way by a technicality of drafting, then it serves only to complicate the law unnecessarily. When the draftsman has drafted his claims in this way, the limitation ceases to have any value for third parties. In the second place, the countries from which most of our patent applications come do not have such a limitation. Much valuable examiner's time is taken up with rejecting amendments proposed by applicants from those countries, which are allowable in those countries but not in Australia. It will be apparent that this will cause further difficulties with the introduction of a modified examination system. I am told that a significant proportion of applications would not qualify for modified examination unless this second limitation were removed. The amendments that would be allowable in the United Kingdom or the United States would not be allowable here.

Summing up, 1 point out that the prohibition against extending the scope of the claims causes a great deal of work in the Patent Office, it would reduce the value of modified examination, and it can readily be avoided by appropriate drafting. In these circumstances it has seemed to me that it ought not to be retained. A number of other changes have been made in this Bill. They do not involve questions of principle and have been included in response to specific criticisms that have been received. Apart from the two main changes I have mentioned, the Bill will also make some other changes in the principal Act. I shall mention only one of these briefly - that is, the amendment made by the Bill to afford recognition to an inventor's certificates. These certificates are granted by the Soviet Union and some east European countries that are parties to the Paris Convention. The amendments are made having regard to amendments made to the Paris Convention at a conference in Stockholm last year.

I have mentioned earlier my desire that effective steps should be taken to mitigate the difficulties being experienced by the Patent Office. But my concern is not merely that there should be a reduction in the time an applicant must wait to have his application examined. Once the pressure of arrears is relieved it will be possible for greater attention to be given to other aspects of the function of the Patent Office that are of importance to industry. The Patent Office is a repository of vast amounts of technical information, but unless that information is adequately classified it cannot be made readily available to industry. I hope that as a result of this Bill, it will be possible to make staff available to give greater attention to this classification work. I commend the Bill to the House.

Debate (on motion by Mr Connor) adjourned.

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