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Grace Periods

What is a grace period?
How does the grace period work?
The pros and cons of grace periods

The introduction of a grace period was announced in the Prime Minister's launch of Backing Australia's Ability: An Innovation Action Plan for the Future in January 2001. Grace periods already apply in 38 countries including the US, Japan and Canada. As of 1 April 2002, a grace period will also apply in Australia.

What is a grace period?

With the introduction of this change, an invention can be made public (under certain conditions) and this will not prevent a valid patent from being granted. This is to cover those circumstances where the inventor has disclosed their invention before applying for a patent, for example when they have discussed it with a contractor without a confidentiality agreement.
Prior to the introduction of the grace period, an invention had to be kept secret before an application for a patent was made. If the inventor showed the invention to another party, a later patent was invalid unless the disclosure was covered by a confidentiality agreement. The introduction of the grace period allows for public disclosure of an invention without affecting the validity of a subsequent patent application (provided that a complete application is filed within 12 months of the disclosure).

The grace period covers disclosures of an invention made by or with the consent of the nominated person or patentee, or their predecessor in title (including the inventor).

The grace period may help a patent application succeed in cases where disclosure of an invention has been made by mistake or is ill timed. However, a grace period should not be used as a general strategy for publicly disclosing an invention before filing a patent application. The lack of a uniform grace period or grace period requirements around the world could mean patent applications that rely on grace period disclosures may be invalid in other countries. In addition, third parties who use an invention in the grace period and before a patent application is made will retain their rights to use the invention.

How does the grace period work?

The grace period covers a period of no more than 12 months before the filing date of the complete application. The grace period will not provide an applicant with an earlier priority date.

The grace period will have no retrospective effect - it will only apply in relation to disclosures that are made on or after 1 April 2002, even if an application is made after 1 April 2002.

The pros and cons of grace periods

The arguments for grace periods include:

Inventors would not lose their rights through accidental disclosure. Indeed, many do not realise they have an invention worth protecting until they see others' interest in it.
Academics may be able to share research results at seminars or conferences, through journals or on the internet without having to waive any prospect of patent rights.
Inventors could engage in field trials, prototyping and negotiating with potential distributors or customers without the need for every relationship to be covered by cumbersome confidentiality agreements. Presently the only alternative is to secure an early patent filing date before disclosing to third parties, but often it is better to do more development work on the invention before lodging a patent application.
All of the above benefits would increase access to and use of the patent system, and result in increased levels of innovation.

In spite of these 'pros' it is nevertheless incumbent on the applicant to ensure they file their application as soon as possible.

The arguments against grace periods include:

The present system is clear and simple. Introduction of grace periods may mislead inventors into thinking that they are safe to disclose their inventions in all circumstances, or confuse inventors as to when their grace period 'clock' started ticking.
Inventors wishing to file patents abroad may be caught out in those countries which do not recognise grace periods or have a different grace period. In other words, a disclosure allowed under the grace period that wouldn't affect the validity of an Australian patent would in all likelihood invalidate a patent in Europe.
The 18 month interval between filing and publication of a patent application already makes life uncertain for inventors as they wait to see which of their competitors' products are going to be covered by patents. By adding a grace period to the publication period the length of the interval of doubt is increased.
A grace period system may encourage people to delay filing patents and securing priority dates. However, the grace period only protects a patent application from the applicant's own prior disclosures. Any delay in filing the application will increase the risk that intervening disclosures by third parties (eg: a competitor) will invalidate or reduce the scope of patent applications.