Standard of proof

Australia

8.62 Section 49 of the Patents Act requires the Commissioner of Patents to accept an application for a standard patent if the Commissioner is ‘satisfied’ that the requirements of novelty and inventive step have been met and the Commissioner ‘considers’ that there is no lawful ground of objection to the patent.^[112]

8.63 The satisfaction test was introduced into the Patents Act in 2001 by the Patents Amendment Act 2001 (Cth), following recommendations in a 1999 report of the Advisory Council on Industrial Property (ACIP IP Enforcement Report) and in the IPCRC Report in 2000.^[113]

8.64 Prior to the 2001 amendment, it was sufficient if the Commissioner ‘considered’ that there was no lawful ground of objection to a patent.^[114] The IPCRC Report noted that, as interpreted by the courts, the earlier position gave the benefit of the doubt to a patent applicant and the Commissioner could only refuse to grant a patent where it was clear that a valid patent could not be granted.^[115]

8.65 Both the ACIP IP Enforcement Report and the IPCRC Report recommended increasing the threshold for acceptance of patent applications ‘so that granted patents would be more likely to be valid’.^[116] The ACIP IP Enforcement Report specifically recommended that ‘the rule giving the benefit of the doubt to the applicant should be abrogated in so far as it relates to novelty and obviousness’.^[117] The IPCRC Report endorsed the views expressed in the ACIP IP Enforcement Report, but cast its recommendation in more general terms:

The Committee recommends changing the Patents Act to require a ‘balance of probabilities’ approach to be used during examination, rather than conferring the ‘benefit of the doubt’ to the applicant as at present.^[118]

8.66 As now amended, s 49 requires a patent examiner to apply two different standards of proof in assessing the requirements for patentability relevant to examination of a patent application.^[119] The requirement that the Commissioner be ‘satisfied’ that an invention is novel and involves an inventive (or innovative) step is a ‘balance of probabilities’ standard. With respect to other requirements for patentability relevant at the examination stage—including that the patent claims comply with s 40 of the Patents Act; that the claimed invention is a ‘manner of manufacture’; and that the invention is not a human being or a biological process for the generation of a human being^[120]—the Commissioner need only ‘consider’ that such grounds are met. As noted above, this has been interpreted as giving the applicant the ‘benefit of the doubt’.^[121]

8.67 The Manual explains the considerations relevant in assessing whether each of the standards of proof has been met:

[The ‘balance of probabilities’] test requires an examiner to weigh up all the material before them and decide, on balance, whether a claimed invention is ‘more likely than not’ to be novel and inventive (or innovative).^[122]

In the case of objections other than novelty, inventive step, and innovative step, the benefit of the doubt is given to the applicant, and objections are maintained if there is little uncertainty as to whether the objection still applies (having regard to the response from the applicant).^[123]

Other jurisdictions

8.68 Other jurisdictions formulate the standard of proof for acceptance of a patent application in a number of different ways. In general, however, the standard of proof is a ‘balance of probabilities’ standard, or equivalent. A ‘balance of probabilities’ standard is applied, for example, by the United Kingdom Patent Office.^[124] The USPTO applies a ‘preponderance of the evidence’ test, which is the civil standard of proof under United States law and, broadly speaking, equates with the ‘balance of probabilities’ standard applied in other jurisdictions.^[125] In addition, unlike Australia, patent offices in other jurisdictions appear to apply a single standard of proof to all the elements of patentability relevant to examination.

8.69 A 2003 report of the New Zealand Ministry for Economic Development (NZ Report) recommended changes to the standard of proof for acceptance of patent applications.^[126] Currently, a New Zealand patent examiner may reject a patent application only if he or she is ‘practically certain’ that any patent granted would be invalid. However, the NZ Report recommended amending the Patents Act 1953 (NZ) to ‘provide that patents can only be granted if, on the balance of probabilities, the requirements for patentability are met’.^[127]

Submissions and consultations

8.70 DP 68 proposed that the Patents Act be amended to require patent examiners to be satisfied on the balance of probabilities when assessing all statutory requirements for patentability that are relevant at the stage of examination.^[128] A range of submissions supported this proposal, including those from government, the healthcare sector and legal academics.^[129] Submissions considered that a single standard of proof could simplify the examination process and improve examination practices. In addition, some submissions specifically addressed the appropriate standard of proof to apply to the usefulness requirement, which is discussed in Chapter 6.

8.71 However, submissions from some patent attorneys expressed concern about imposing a balance of probabilities standard for all the patentability criteria relevant at the examination stage. F B Rice & Co submitted that a benefit of the doubt standard should continue to apply in relation to the issues of fair basis, best method, succinctness and the meaning of specific terms in a patent specification.^[130] Similarly, the Institute of Patent and Trademark Attorneys of Australia (IPTA) indicated that the requirements of usefulness, fair basis and sufficiency should be assessed according to a benefit of the doubt standard because these issues cannot be thoroughly or objectively considered at the examination stage.^[131]

8.72 IPTA was particularly concerned about the effect of applying a balance of probabilities standard to the manner of manufacture requirement. It suggested that the ability of Australian patent law to adapt to changes in technology ‘has only been possible through the applicant being given the benefit of the doubt when considering whether new “unpatented” subject matter qualified for protection’.^[132]

8.73 However, IP Australia commented that applying a balance of probabilities standard to the manner of manufacture requirement ‘would not make a significant difference to the standard that currently applies’:

An objection based on manner of manufacture is unlikely to involve evidence, in contrast to objections based on novelty, fair basis and sufficiency. Rather, it is whether, in the Commissioner’s opinion, the application is for patentable subject matter according to precedent, and the flexible notion of ‘is this a proper subject of letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies?’^[133]

8.74 IP Australia expressed support for the proposal that a balance of probabilities standard should apply to all criteria for patentability relevant at the examination stage. For simplicity, it said that no criterion should be excluded from the higher threshold.^[134]

8.75 A small number of submissions cautioned that raising the standard of proof may have adverse consequences for perceptions of Australian patent law and for Australian companies in the global biotechnology market and that these factors should be carefully considered before any amendments were proposed.^[135] Other submissions noted that, if the standard of proof were raised, the change should apply to applications claiming all types of technologies, not merely to gene patent applications.^[136]

ALRC’s views

8.76 Submissions to the Inquiry did not support the adoption of a standard of proof that would apply only to gene patent applications. The ALRC agrees that gene patent applications should be subject to the same standard of proof as applications for patents over any other type of technology. To draw a distinction would require difficult, and sometimes arbitrary, boundaries to be drawn between applications for patents over different types of technology. In addition, requirements that would apply only to gene patents may be inconsistent with Australia’s obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 to provide patent protection to all inventions without discrimination as to field of technology.^[137]

8.77 The ALRC considers that the Patents Act should be amended to provide a single standard of proof for all patent applications examined by IP Australia and that the applicable standard of proof should be on the balance of probabilities (see Recommendation 8–3). As discussed in Chapter 6, this standard should also apply to the question whether an invention claimed in a patent application is ‘useful’ (see Recommendation 6–3). Recommendation 8–3 would not change the standard of proof applicable to the requirements of novelty and inventive (or innovative) step because a balance of probabilities standard already applies to these requirements. However, it would raise the bar in relation to other requirements for patentability that are relevant at the examination stage.

8.78 In the ALRC’s view, the rationale for maintaining two different standards of proof in relation to different requirements for patentability at the examination stage is unclear. Applying different standards of proof adds unnecessary complexity to the examination of patent applications and might generate confusion on the part of patent applicants and patent examiners. There are practical difficulties for examiners in applying different levels of proof to different criteria for patentability, and the effect of this might be that examiners apply a single standard of proof in practice.

8.79 The ALRC is not persuaded by arguments in submissions that certain requirements for patentability should be excluded from the application of a higher standard of proof. In particular, IP Australia has suggested that the manner of manufacture requirement is not primarily a factual matter in relation to which evidence can be adduced. A change in the standard of proof is therefore unlikely to have a significant effect on the Patent Office’s decisions in this area.

8.80 Applying a balance of probabilities standard might increase the burden placed on an applicant and require additional evidence to be adduced at the examination stage. However, the ALRC agrees with the views expressed in the ACIP IP Enforcement Report and the IPCRC Report that requiring a balance of probabilities standard to be met before a patent application is accepted will increase the likelihood that a granted patent will be held to be valid. This is particularly important in relation to patents over genetic materials and technologies. The advantages of this approach include the potential to reduce enforcement costs by increasing a patent’s prospects of validity. It is also worth noting that the patent law in many other jurisdictions requires patent examiners to apply a balance of probabilities standard, or an equivalent, with no apparent ill effects.

8.81 Imposing a balance of probabilities standard may not address all the concerns that have been raised about the examination of gene patent applications because there are inherent—and justifiable—limitations to the examination process.^[138] In particular, the prosecution of a patent application is analogous to an ex parte procedure in that a patent examiner does not generally have the benefit of arguments and supporting evidence on both sides of any issue. The limitations of the examination process must also be seen in the light of other mechanisms in the patent system that allow the validity of patents to be tested. Other recommendations in this Report are directed to improving mechanisms for challenging patent rights and the way in which patents are exploited.^[139]