29 May 2024 is an important date in the history of patent law as it marks the quadricentennial of the Statute of Monopolies (21 Jas. 1. c. 3). The Statute of Monopolies was passed by the Parliament of England and received royal assent on 29 May 1624.
Although the Venetian Patent Statute of 1474 is generally considered by historians to be the first formal statute relating to patentable inventions, the Statute of Monopolies is the direct ancestor of modern patent systems, particularly in common law jurisdictions.
Relevance of the Statute of Monopolies in Australian Patent Law
How is a 400 year-old English law still relevant today?
The Statute of Monopolies is still incorporated into the Australian and New Zealand patents acts by reference, as the test for patentable subject matter.
In Australia, section 18(1)(a) of the Patents Act 1990 states that an invention is a patentable invention if it is:
a manner of manufacture within the meaning of section 6 of the Statute of Monopolies …
Moreover, the Patents Act 1990 defines an invention as:
any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies, and includes an alleged invention.
The Beginning
Prior to the enactment of the Statute of Monopolies, English law relating to “letters patent” was based on custom and the common law rather than statute. The Crown would grant monopolies, typically to court favourites, for the sale or production of certain products within the Realm. The patent holder would pay the Crown in return for the monopoly provided, allowing the Crown to generate revenue while avoiding imposing unpopular taxes.
This system caused a distinct lack of competition for the sale of certain essential items including starch and salt and even less essential items like playing cards. Those granted patent rights were free to sell at a price and quality largely of their choosing, with predictable results for consumers. Popular discontent with Crown-bestowed monopolies increased during the rule of Elizabeth I and James I.
The Parliament enacted the Statute of Monopolies to eliminate “odious monopolies” and repeal the majority of previously granted patents.
Section 6 of the Statute of Monopolies however, set out an exception to the general prohibition on monopolies for:
…letters patents and grants of privilege for the term of fourteen years or under, hereafter to be made, of the sole working or making of any manner of new manufactures within this realm to the true and first inventor and inventors of such manufactures, which others at the time of making such letters patents and grants shall not use, so as also they be not contrary to the law nor mischievous to the state by raising prices of commodities at home, or hurt of trade, or generally inconvenient…
The modern patent system developed in significant part due to the judicial interpretation of this foundational section over the centuries that followed.
The United Kingdom removed reference to the Statute of Monopolies when the Patents Act 1977 (UK) came into force, as required by the UK’s membership of the European Patent Convention.
However, the Statute of Monopolies remains explicitly cited in Australia and New Zealand patent legislation, despite the passage of entirely new patents acts in both countries (most recently, the Patents Act 1990 and the Patents Act 2013 respectively). The Parliaments of both countries have decided that the large body of case law developed under section 6 should not be replaced by codification of patent eligibility, and that the courts remain best placed to grapple with the question of what subject matter – from the ever-unfolding products of human ingenuity – should be eligible for protection by the patent system.
Happy 400th birthday to the Statute of Monopolies!
