📌 1) What Was the Innovation Patent?

An innovation patent was a second-tier patent right in Australia designed to give inventors quick, inexpensive protection for incremental or lower-level inventions, especially for small and medium-sized enterprises (SMEs). It differed from the standard patent in key respects:

Shorter term: maximum 8 years vs 20 for a standard patent.

Lower threshold for protection: required an “innovative step” instead of the more demanding “inventive step.”

Limited number of claims: up to 5.

Quicker grant: granted after a formalities check, without substantive examination; enforceable only after certification.

The policy goal was to support SMEs by providing a simpler and cheaper route to meaningful rights.

📌 2) Why and How It Was Phased Out

Why Abolition Was Chosen

Government reviews — including by the Productivity Commission — concluded that the innovation patent system didn’t meet its original objectives and was vulnerable to misuse:

The innovative step threshold was often too low, making some innovation patents effectively easy to secure and difficult to challenge.

There was evidence of strategic misuse by larger parties, undermining competition.

Innovation patents had low uptake by SMEs — they were not serving their intended users.

Legislation & Timeline

The Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020 introduced phase-out provisions.

After 25 Aug 2021, no new direct innovation patent applications are permitted. However, it remains possible to:

File a divisional innovation patent based on a parent application with an earlier effective filing date; and

Convert a standard patent application (with priority before the cut-off) into an innovation patent application.

Existing innovation patents continue in force until they expire or lapse.

📌 3) Patentability Requirements — Innovative Step vs Inventive Step

Innovative Step (Innovation Patent)

An innovation patent did not require inventive step (as in standard patents). Instead, it required an innovative step, defined in the Patents Act to mean:

the invention differs from prior art and that difference makes a substantial contribution to the “working” of the invention.

The threshold is generally lower than an inventive step test — more akin to a modified novelty comparison with a functional contribution requirement.

Inventive Step (Standard Patent)

For standard patents, the inventive step test asks whether the claimed invention would have been obvious to a person skilled in the relevant art in view of common general knowledge and prior art. This is a significantly more demanding test than innovative step.

📌 4) Relevant Case Law on Innovation Patents

While there is much more case law on standard patents, the following cases and decisions illustrate key principles relevant to innovation patents:

📍 Dura-Post v Delnorth Pty Ltd

One of the few reported cases directly interpreting the innovative step test in an innovation patent context. The court examined whether limitations in the claims made a substantial contribution to the working of the invention.

This case showed that the innovative step test can be lower than inventive step — even trivial functional differences can satisfy the requirement if they materially affect working of the invention.

Note: Very few innovation patent decisions are widely reported, partly because many are not judicially contested before expiration or certification.

📍 Patent Office Decisions & Federal Court Appeals

While not always high-profile, decisions of the Patent Office on innovation patent examination have been appealed to the Federal Court. They often focus on:

Whether each claim individually satisfies the innovative step requirement.

Whether prior art disclosures disclose the functional contribution of claim features.

However, detailed published judgments remain relatively limited.

📍 Related Patent Doctrine in Standard Patent Cases

Though not specific to innovation patents, broader patent law precedents still inform how courts think about thresholds like inventive/innovative steps. For example:

AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99 (inventive step principles).

Wellcome Foundation Ltd v VR Laboratories (1981) 148 CLR 262 (test for obviousness — standard patent).

These doctrines illuminate the comparative test used in patent validity assessments.

📌 5) Practical Impacts

🧠 For Innovators

No new direct innovation patents can be filed; only divisional/converted applications based on older filings.

Standard patents remain the primary protection route, with a higher threshold but longer protection (20 years).

Some inventors filing just before the cut-off tried to leverage innovation patents for enforcement before expiry.

⚖️ For Litigation and Validity Challenges

Innovation patents could be certified and then enforced — requiring examination and enabling litigation.

Attacks often focused on whether innovative step had been satisfied in view of prior art.

Because innovative step is lower, innovation patents sometimes survived validity challenges that would defeat standard patents.

📌 6) Summary

Phase-out Key Points

Innovation patents were phased out by legislation in 2020.

Last filing date was 25 Aug 2021; system winds down by 2029.

Existing rights continue until natural expiry.

Patentability Differences

Innovative step (innovation patent): a lower bar than inventive step (standard patent).

This led to strategic use and eventual abolition due to concerns over misuse and limited SME benefit.

Case Law

Dura-Post v Delnorth is a key reported innovation patent case interpreting innovative step; most broader doctrine is grounded in standard patent jurisprudence.