Insights

In brief - A patent can be a powerful tool to protect your business

If you own a patent for something you have invented, you have an exclusive right to commercialise it; to stop others from manufacturing, using or selling it without your permission; and to take legal action against those who do so.

What is a patent?

A patent is legally enforceable right that provides the patent owner with exclusive rights to use and commercialise an invention in the patent territory for the life of the patent. In exchange for this monopoly right, the patent owner must disclose to the public how the invention works.

A patent can be granted for a device, substance, method or process that has been created that is new, inventive and useful when compared with what is already published or known in the world.

Patents are applied for and granted on a country by country basis. A patent granted in Australia does not provide protection outside of Australia. However, there are treaties between countries that allow for group applications in multiple countries.

Need for an inventive step

For a standard patent to be granted, the subject of the patent must be created using an inventive step and must be able to be used in an industry.

An inventive step means that the invention is not an obvious thing to do for someone with knowledge and experience in the technological field of the invention.

To be successful, a patent application must be able to show that the invention is different in some way from existing technology, and that the difference derives from a new idea which is something additional to the combination of previously published information or background knowledge.

What things can be patented?

Patents can apply to a wide range of commercial activities. They can be granted for any commercial invention that is new, original and useful (the "base criteria"). Commercial inventions can be related to all commercial activities.

Special provisions apply to software, hardware, computer circuits and other computer-related inventions, business methods, biological inventions, micro-organisms and other biological materials.

For example, a "business method" may be subject to a patent application where it directly involves a physical form or device to bring about a "useful product". For a business method to be patentable, it must satisfy the base criteria and show that the application of technology to a business method (eg to online business, financials, reporting or analysis) is directly involved with the creation of the "useful product" in a substantial, not just incidental manner.

What things cannot be patented?

Not new or original 

Patents will not be granted if the subject of the patent application is not original or new when compared with things that are already known. As an example, an Australian patent application will not be granted if the subject of the patent was published or disclosed outside of Australia, even if the inventor can show that he or she did not have any knowledge or awareness of the prior work.

Not secret at time of patent application 

A patent application will also not be granted if the proposed invention is not new because the invention was publicly disclosed before the patent application was filed. This disclosure may be via marketing or a commercial presentation or a description in non-confidential communication.

A patent application may be defeated if an opponent can demonstrate that the applicant has sold or discussed the invention in public before the patent application was filed.

Idea not subject to patentability

A patent application will be refused if it is for the expression of a principle or idea, without a practical adaptation.

In Australia, patent applications are not allowed for human beings or the biological process for their generation, artistic creations, mathematical models, plans, schemes or other purely mental processes. Patent applications for inventions with military application have further limitations.

Benefits of holding a patent

Australian patents can be useful tools to build and protect businesses. Benefits to patent owners of building a portfolio of patents include but are not limited to:
  • an exclusive right to stop others from manufacturing, using and/or selling the invention described in the patent in Australia without permission; and
  • an exclusive right to commercialise the patent, including the ability to license third parties to manufacture the patented invention on agreed terms and to take legal action against people who are using the patented invention without permission.

Terms and costs of patents

An Australian "standard patent" can provide patent protection to its owner for up to 20 years. Patents for pharmaceutical ideas can provide patent protection to their owners for up to 25 years.

An Australian "innovation patent" can provide patent protection to its owner for up to eight years. Innovation patents are designed to protect inventions that do not meet the inventive threshold required for standard patents.

In addition to the expenses incurred to write and prosecute a patent application to registration, owners of registered patents are required to pay annual maintenance fees for their patents.

What if patent protection is not available?

If an invention which is the subject of a patent application does not qualify for patent protection for some reason, the application still has the legal means to protect the secret nature of the invention. Careful planning will be required to make sure the invention can be commercialised and still remain "secret" or "proprietary" to the inventor's business.

Also, depending on how the invention is expressed, it may be subject to other legal protections such as design registration or copyright.

This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal or financial advice. Please seek your own legal or financial advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.​

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