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2010-2011-2012-2013
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF REPRESENTATIVES
INTELLECTUAL PROPERTY LAWS AMENDMENT BILL 2013
EXPLANATORY MEMORANDUM
(Circulated by authority of the Hon Greg Combet AM MP, Minister for
Climate Change, Industry and Innovation)
1
INTELLECTUAL PROPERTY LAWS AMENDMENT BILL 2013 ..............................6
OUTLINE ...........................................................................................................................6
Schedule 1: Crown use ...................................................................................................6
Schedule 2 and Schedule 3: TRIPS Protocol interim waiver and TRIPS Protocol: later
commencing amendments ..............................................................................................6
Schedule 4: Plant Breeder`s Rights Act 1994: Federal Circuit Court ............................7
Schedule 5: Australia New Zealand Single Economic Market ......................................7
Schedule 6: Other amendments......................................................................................8
FINANCIAL IMPACT STATEMENT .................................................................................9
REGULATION IMPACT STATEMENT .............................................................................9
Invoking the Crown Use Provisions for a Patented Invention ...........................................9
PROBLEM .....................................................................................................................9
Role of patents ...........................................................................................................9
Crown Use provisions ................................................................................................9
Productivity Commission inquiry ............................................................................10
OBJECTIVE OF GOVERNMENT ACTION .............................................................14
OPTIONS THAT MAY ACHIEVE THE OBJECTIVE .............................................14
IMPACT ASSESSMENT ............................................................................................15
Who would be affected by each option? ..................................................................15
Impacts of each option .............................................................................................15
CONSULTATION .......................................................................................................19
The consultation process ..........................................................................................19
Views expressed during the consultation process ....................................................20
How stakeholders` views have been taken into account ..........................................20
CONCLUSION AND PREFERRED OPTION ...........................................................21
IMPLEMENTATION AND REVIEW ........................................................................21
REGULATION IMPACT STATEMENT ...........................................................................22
Export of Patented Pharmaceuticals to Countries Experiencing a Health Crisis .............22
BACKGROUND .........................................................................................................22
Intellectual property and access to medicines ..........................................................22
TRIPS Agreement ....................................................................................................23
Doha Declaration .....................................................................................................24
TRIPS Protocol ........................................................................................................24
Australia`s acceptance of the TRIPS Protocol .........................................................26
PROBLEM ...................................................................................................................26
Government regulation ............................................................................................28
OBJECTIVE OF GOVERNMENT ACTION .............................................................29
OPTIONS THAT MAY ACHIEVE THE OBJECTIVE .............................................29
Power to grant licences ............................................................................................30
Limitations on licences ............................................................................................30
Prior negotiation.......................................................................................................30
Eligible products and importers ...............................................................................31
IMPACT ASSESSMENT ............................................................................................31
Who would be affected by each option? ..................................................................31
What would be the effects of each option? ..............................................................31
CONSULTATION .......................................................................................................37
The consultation process ..........................................................................................37
Views expressed during the consultation process ....................................................37
How stakeholders` views have been taken into account ..........................................38
2
CONCLUSION AND PREFERRED OPTION ...........................................................39
IMPLEMENTATION AND REVIEW ........................................................................39
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS ......................................41
Preliminary Matters..........................................................................................................43
Notes on clauses ...........................................................................................................43
Clause 1: Short title ..................................................................................................43
Clause 2: Commencement .......................................................................................43
Clause 3: Schedules .................................................................................................44
Schedule 1--Crown Use ..................................................................................................45
Introduction ..................................................................................................................45
Items 1 to 3: Section 3 (list of definitions)...............................................................46
Item 4: Crown exploitation of inventions ................................................................46
Item 5: Crown exploitation ......................................................................................48
Items 6 and 7: Section 164 .......................................................................................51
Items 8 and 9: Crown exploitation--terms (including remuneration) .....................52
Item 10: Subsection 165(3) ......................................................................................53
Item 11: Subsection 165A (heading) .......................................................................53
Items 12 to 15: Subsections 165A(1) and 165A(2)..................................................53
Items 16 to 18: Section 166......................................................................................53
Item 19: Subsections 167(1) and (2) ........................................................................54
Item 20: Section 169 ................................................................................................54
Item 21: Schedule 1..................................................................................................54
Item 22: Definition ...................................................................................................55
Item 23: Application of amendments .......................................................................55
Item 24: Transitional--authorised person................................................................55
Item 25: Transitional--negotiations ........................................................................55
Item 26: Transitional--agreements and determinations ..........................................56
Schedule 2--TRIPS Protocol interim waiver ..................................................................57
Introduction ..................................................................................................................57
Items 1 to 11: List of definitions ..............................................................................59
Items 12, 13 and 14: Extensions of patent term .......................................................59
Items 15 to 18: Compulsory licences (general) .......................................................60
Item 19: Compulsory licences (patented pharmaceutical inventions) .....................61
Item 20: Revocation of patents (general) .................................................................73
Item 21: New Heading for Part ................................................................................73
Items 22 and 23: Parties to proceedings...................................................................73
Item 24: Regulation-making power .........................................................................73
Item 25: Definition of compulsory licence ..............................................................74
Item 26: Definition of eligible importing country ...................................................74
Item 27: Definition of patented pharmaceutical invention ......................................74
Item 28: Definition of pharmaceutical product ........................................................75
Items 29 to 34: PPI definitions .................................................................................75
Item 35: Definition of WTO General Council decision of 30 August 2003 ............75
Item 36: Application of amendments .......................................................................75
Schedule 3--TRIPS Protocol: later commencing amendments.......................................77
Introduction ..................................................................................................................77
Items 1 and 2: Definitions ........................................................................................77
Item 3: Amendment of reference to 2003 General Council decision.......................77
Item 4: Definition of eligible importing country .....................................................77
Items 5 and 6: Definition of TRIPS Agreement ......................................................77
3
Schedule 4--Plant Breeder`s Rights Act 1994: Federal Circuit Court ............................79
Introduction ..................................................................................................................79
Items 1, 2 and 3: Definitions ....................................................................................79
Item 4: Subsection 39(5) ..........................................................................................79
Item 5: Subsection 50(7) ..........................................................................................79
Items 6 and 7: Actions for infringement ..................................................................80
Items 8 and 9: Declarations of non-infringement ....................................................80
Items 10 to 16: Jurisdiction of the Federal Court.....................................................80
Item 17: Correcting a typographical error................................................................80
Item 18: New section 56A Jurisdiction of Federal Circuit Court ............................80
Items 19 and 20: Innocent infringement ..................................................................81
Item 21: Agents may act in matters relating to PBR................................................81
Schedule 5--Australia New Zealand Single Economic Market ......................................82
Introduction ..................................................................................................................82
Part 1--Amendments ...............................................................................................85
Designs Act 2003 .........................................................................................................85
Items 1 to 4: Service of documents in Australia or New Zealand ...........................85
Patents Act 1990 ..........................................................................................................86
Items 5 to 13: Definitions.........................................................................................86
Items 14 and 15: Protection of New Zealand delegates ...........................................86
Item 16: Disclosure of information to New Zealand Registrar of Companies and to
New Zealand delegates of the Commissioner ..........................................................87
Item 17: Repeal of an outdated offence provision ...................................................87
Item 18: Repeal of residency requirement ...............................................................88
Item 19: Reference to the Professional Standards Board .........................................88
Items 20 and 21: Registration of patent attorneys....................................................88
Items 22 and 23: Deregistration of patent attorneys ................................................90
Items 24 to 26: Delegation to New Zealand patents officials ..................................91
Items 27 and 28: Filing documents with specified New Zealand patents officials ..91
Items 29 to 32: Service of documents in Australia and New Zealand .....................92
Items 33 and 34: Extensions of time for errors or omissions of New Zealand
delegates ...................................................................................................................93
Item 35: Administrative Appeals Tribunal review ..................................................94
Items 36 and 37: Payment of Australian fees in New Zealand ................................94
Item 38: Payment of New Zealand fees in Australia; Application of administrative
law regime to decisions made in New Zealand ........................................................95
Items 39 to 46: Trans-Tasman IP Attorneys Board .................................................97
Item 47: Reference to the Professional Standards Board .......................................100
Item 48: Regulations for matters in Australia or New Zealand .............................100
Items 49 to 59: Amendments to Schedule 1 (definitions) ......................................100
Plant Breeder`s Rights Act 1994 ................................................................................102
Items 60 to 68: Service of documents in Australia or New Zealand .....................102
Trade Marks Act 1995 ...............................................................................................103
Items 69 to 72 and 79 to 81: Replacing references to the Professional Standards
Board with references to the Board........................................................................103
Items 73 to 78: Service of documents in Australia or New Zealand .....................103
Part 2--Transitional provisions .............................................................................104
Item 82: Transitional registration of New Zealand patent attorneys as Australian
patent attorneys ......................................................................................................104
4
Item 83: Transitional qualification of persons who had not yet completed the New
Zealand registration exams ....................................................................................104
Item 84: Deregistration of patent attorneys for conduct in New Zealand before
commencement ......................................................................................................105
Item 85: Transitional registration of New Zealand patent attorneys as Australian
trade marks attorneys .............................................................................................106
Schedule 6--Other Amendments...................................................................................107
Introduction ................................................................................................................107
Part 1--Document Retention .....................................................................................107
Items 1 and 2: Designs Act 2003 ...........................................................................107
Item 3: Patents Act 1990 ........................................................................................107
Item 4: Trade Marks Act 1995 ...............................................................................107
Item 5: Application of amendments .......................................................................108
Part 2--Technical amendments .................................................................................108
Item 6: Heading replacement .................................................................................108
Item 7: Requests from PCT applicants prior to national phase entry ....................108
Item 8: Prescribing period for Paris Convention applications ...............................109
Item 9: Subsection heading ....................................................................................109
Item 10: Disclosure requirements for provisional applications for micro-organism
inventions ...............................................................................................................109
Item 11: Combination of documents for disclosure of invention ..........................110
Item 12: Disclosure requirements to support the priority date for micro-organism
inventions ...............................................................................................................110
Item 13: Typographic error ....................................................................................111
Item 14: Infringement exemption ..........................................................................111
Item 15: Rectification of the Patent Register in respect of entitlement disputes ...111
Item 16: Application of amendments .....................................................................112
5
INTELLECTUAL PROPERTY LAWS AMENDMENT BILL 2013
OUTLINE
The objective of the intellectual property (IP) rights system is to support innovation by
encouraging investment in research and technology in Australia and by helping
Australian businesses benefit from their good ideas. The purpose of this Bill is to
introduce a range of improvements across Australia`s intellectual property system,
making refinements to existing arrangements and implementing new initiatives aimed at
increasing efficiency and effectiveness.
The Bill`s amendments to the Patents Act 1990, Trade Marks Act 1995, Designs Act
2003 and the Plant Breeder's Rights Act 1994 are divided into six schedules:
o Schedule 1--Crown use
o Schedule 2--TRIPS Protocol interim waiver
o Schedule 3--TRIPS Protocol: later commencing amendments
o Schedule 4--Plant Breeder`s Rights Act 1994: Federal Circuit Court
o Schedule 5--Australia New Zealand Single Economic Market
o Schedule 6--Other Amendments
Schedule 1: Crown use
The Patents Act permits the Commonwealth or a State (or their authorised person) to
exploit an invention described in a pending patent application or in a granted patent
without the need for authorisation by the owner. This is known as Crown use`. The
existence of Crown use provisions provides a safeguard to ensure the patent system does
not impede governments from acting in the public interest. This is unlike private traders
as the Crown is ordinarily engaged in public services rather than commercial activities.
There are recognised problems with the existing crown use provisions. The scope of
Crown use` is unclear. In particular, the extent to which the phrase for the services of
the Commonwealth or a State` can include non-government bodies that deliver goods or
services in sectors where governments have primary responsibility is uncertain. There
are also concerns that there is insufficient transparency and accountability in the process
for using the Crown use provisions.
The Bill provides amendments that will clarify and improve the operation of the
provisions in the Patents Act concerning Crown use to reduce uncertainty in the
operation of these provisions.
Schedule 2 and Schedule 3: TRIPS Protocol interim waiver and
TRIPS Protocol: later commencing amendments
The Australian public benefits through having access to the latest technology, products
and services. Many least-developed and developing countries have difficulty
6
manufacturing or accessing patented pharmaceuticals, and so are unable to respond
effectively to public health problems. This Bill will amend the Patents Act to allow
Australian pharmaceutical manufacturers to supply these countries with the patented
medicines they need.
The amendments will deliver on the Australian Government`s commitment to
implement the Protocol amending the World Trade Organization Agreement on Trade-
Related Aspects of Intellectual Property (the TRIPS Protocol). Under the new scheme,
Australian laboratories will be able to apply to the Federal Court for a compulsory
licence to manufacture generic versions of patented medicines under specific conditions,
and export these medicines to developing countries. Adequate compensation for the
patent holder will be negotiated, to ensure that they are not disadvantaged by the
arrangements.
The scheme is designed to be as easy to use as possible and is open to all developing
countries provided they meet specified criteria.
Schedule 4: Plant Breeder's Rights Act 1994: Federal Circuit
Court
To be effective, IP rights must be enforceable by the IP right owner. The Federal Circuit
Court is designed to deal with less complex matters more quickly and informally than
the Federal Court. This Bill will amend the Plant Breeder`s Rights Act to give the
owners of plant breeder`s rights the option of taking action in the Federal Circuit Court
against alleged infringers.
Schedule 5: Australia New Zealand Single Economic Market
This Bill will allow the streamlining of the processes for applying for patents in
Australia and New Zealand, and for the examination of common applications. Single
patent application and examination processes for Australia and New Zealand aims to
remove duplication, making it easier for businesses to protect their intellectual property
in both countries.
Under this single examination model, if separate patent applications for the same
invention are filed in both Australia and New Zealand, then both applications may be
examined by a single examiner in either country. The regime will take account of the
separate national laws, and would lead to separate patents being granted in Australia and
New Zealand. A single patent examination process is part of a suite of intellectual
property initiatives proposed under the trans-Tasman Single Economic Market agenda,
agreed to by the Australian and New Zealand Prime Ministers in August 2009.
Patent attorneys are a class of IP professional who assist businesses by drafting
applications for the grant of patents and prosecuting those applications before patent
offices. Currently, Australia and New Zealand each have their own longstanding
systems of regulation for patent attorneys, governing their accreditation, registration and
discipline.
This Bill will implement a bilateral arrangement between the Australian and New
Zealand governments for the trans-Tasman regulation of patent attorneys in both
7
Australia and New Zealand. This arrangement was signed by the relevant Ministers in
Australia and New Zealand in March 2013.
The arrangement provides for a single trans-Tasman register of patent attorneys, with
registration giving a person the right to practise as a patent attorney in both countries. It
also establishes a single set of qualifications for registration, a single trans-Tasman IP
Attorneys Board and a single trans-Tasman IP Attorneys Disciplinary Tribunal. This
will provide efficiencies in the registration and regulation of patent attorneys, and will
improve the consistency of patent attorney services provided in Australia and New
Zealand.
Schedule 6: Other amendments
Part 1 of Schedule 6 will make minor administrative changes to the Patents, Trade
Marks and the Designs Acts to repeal unnecessary document retention provisions. These
provisions currently require IP Australia to physically retain patent, trade marks and
designs documents for an extended period of time. The retention and disposal of these
documents is already comprehensively governed by the Archives Act 1983 and the
records disposal authorities issued by the National Archives of Australia.
Part 2 of Schedule 6 will make a number of technical amendments to the Patents Act to
address minor oversights in the drafting of the Intellectual Property Laws Amendment
(Raising the Bar) Act 2012. The Raising the Bar Act introduced a wide range of
intellectual property reforms designed to help Australian businesses and researchers, and
all its provisions entered into full effect by 15 April 2013.
8
FINANCIAL IMPACT STATEMENT
The Bill is expected to have no financial impact on the Commonwealth.
REGULATION IMPACT STATEMENT
Invoking the Crown Use Provisions for a Patented Invention
PROBLEM
Role of patents
A patent is a legally-enforceable right to exclude others from commercially exploiting a
device, substance, method or process that is new, inventive, and useful at the time the
patent was granted. Patents rights are of limited duration, generally a maximum of 20
years.
The patent system serves three roles: to provide incentives to innovate; to encourage
dissemination of knowledge; and to facilitate technology transfer and commercialisation.
The patent system benefits society by promoting innovation that would not otherwise
occur and public access to, and diffusion of, new technologies. The system benefits
patentees by giving them certain exclusive rights for a limited period that facilitates
investment in invention. In order to enhance the net welfare of Australian society, the
patent system is structured to provide an appropriate balance between the interests of
different stakeholders.
Crown Use provisions
The Patents Act 1990 (the Act) contains a number of mechanisms that allow exploitation
of a patented invention without the patentee`s authorisation. These mechanisms are
essential safeguards to be invoked in exceptional cases where the outcome associated
with a patent would not serve the best interests of the community as a whole. These
mechanisms include the compulsory licensing provisions (sections 133-140 of the Act),
research and regulatory approval exemptions (sections 119B and 119C of the Act) and
the Government use and acquisition provisions (sections 163-171 of the Act).
The compulsory licensing provisions allow a person to obtain a non-exclusive licence to
work` a patented invention under specific circumstances. There are two grounds for the
granting of a compulsory licence. An applicant must satisfy either a reasonable
requirements of the public` test or demonstrate certain offences under competition law
have, or are going to, occur.
The Crown use provisions (sections 163-170 of the Act) allow governments to access
patented inventions under specific circumstances. Such provisions have been part of
Australian law since the first Commonwealth Patents Act of 1903 and were derived
from earlier English law. The reasons for Crown use provisions generally include:
9
- the Crown should not be impeded by patents (which are, in effect, Crown grants)
from acting in the public interest, particularly in relation to matters of national
defence
- unlike private traders, the Crown, through its departments and authorities is
ordinarily engaged in public services, rather than commercial activities, and
therefore should be in a special position in regards to use of patented inventions.
Crown use can only be invoked for the services of the Commonwealth or of a State
(section 163(1)). Where the provisions are invoked, the patent holder is entitled to
remuneration under section 165 of the Act. In the absence of an agreement between the
relevant government authority and the patent holder, either party can apply to a court to
determine the terms.
Most foreign patent systems include mechanisms for the government to make use of
patented inventions under appropriate circumstances.
Crown use has rarely been used in Australia. There are only two cases reported where
Crown use has been contested before the courts, otherwise data are difficult to obtain as
uncontested use is not normally reported. While the provisions appear to be rarely used
their availability may facilitate agreement in negotiations of other types of licensing.
Productivity Commission inquiry
The Productivity Commission Inquiry into Compulsory Licensing of Patents was
commissioned by the Assistant Treasurer in June 2012. The Inquiry arose from a
number of reviews of gene patents` and was tasked to review the operation of the
compulsory licensing provisions of the Patents Act 1990, but also any alternative
mechanisms deemed necessary to ensure that the balance between incentives to
innovate and access to technology is appropriate. The Productivity Commission
considers that Crown use will be a more efficient and cost effective way for
governments to make use of patented inventions than compulsory licensing.
The Productivity Commission viewed Crown use provisions as likely to be effective and
appropriate when a potential licensee would not be able to earn a sufficient return on
the licence, compared to the benefits that the licence will create for the broader
community`1.
Based on submissions received from inquiry participants the Productivity Commission
considered that reforms to the Crown use are warranted in two main areas. Firstly, the
scope of what types of entities can actually make use of the Crown use provisions is
unclear, particularly in the healthcare field. Secondly changes to improve transparency
and accountability around such use.
The issues are inter-related and the problems identified with Crown use concern the low
levels certainty. Certainty of the scope of exercise of Crown use presupposes certainty of
what constitutes the Crown. Certainty of the scope of the exercise of Crown use
presupposes certainty that it has been used and why it has been used (as Crown use is
1
Chapter 7: Compulsory Licensing of Patents Productivity Commission Inquiry Report, No. 61, 28 March
2013
10
rare and voluntary licensing is routine). Certainty of the impact of Crown use relates to
the structure of the remuneration process for it.
Lack of clarity about Crown Use
The Productivity Commission notes that it is evident that there is uncertainty among
stakeholders` concerning Crown use. They stated that:
The Patents Act states that Crown use can only be used `for the services of' a
government, which the courts could interpret narrowly to exclude healthcare.
Conversely, it could be argued that this is unlikely, given that Crown use has previously
been allowed for railways and domestic water supply.
Healthcare services are sometimes provided by non-government organisations, such as
privately owned testing laboratories, which some participants considered to be outside
the scope of Crown use. An alternative view is that non-government providers can be
included because the Patents Act allows a government to authorise other parties to
undertake Crown use on its behalf.
Genetic samples taken in one state are sometimes tested by a laboratory in another
state. Some participants questioned whether states can apply Crown use outside their
borders in such cases. Some were also concerned that states have to invoke Crown use
individually, rather than coordinate their actions. An alternative view is that the Patents
Act does not limit the geographic location of Crown use, or interjurisdictional
coordination.
The Australian Law Reform Commission (ALRC) and the Advisory Council on
Intellectual property (ACIP) appear to view the scope of the Crown and hence the scope
of Crown use as unclear to many. The Productivity Commission stated:
The ACIP review contended that there was a need for clarity in demarcating the scope
of the Crown. Uncertainty surrounds a number of entities that could potentially qualify as
the Crown, including, employees, commissions, statutory authorities, statutory
corporations, government business entities, government owned corporations and private
corporations under contract to the government (ACIP 2005a). Similarly, the ALRC
(2004) raised concerns of ambiguity on the issue of whether some research institutes
have sufficient government involvement to be considered the Crown. It pointed out that
such institutions may be established by state legislation and be affiliated with public
sector universities or hospitals, but be self-governing, with their own set of research
priorities and sources of funding.
Submissions to the inquiry that viewed the current scope of the Crown and hence the
scope of exercise of Crown use as unclear were included in the Productivity
Commission Draft Report.
The Department of Health and Ageing expressed the view that there is some lack of
clarity as to how far the services of` the government extend, but it is unlikely it would
extend to use of the patent by non-government service providers (such as privately
owned medical testing laboratories).
Royal College of Pathologists of Australasia expressed the view that if a particular State
Government invokes Crown use of a gene patent to provide a particular medical genetic
test for its citizens, would the provision for Crown use extend to the testing of samples
that had been sent from another State for analysis? If not, each State would need to
invoke Crown use of that gene patent and develop its own test to meet the needs of the
patients in its own jurisdiction.
11
Civil Liberties Australia had questions regarding which Crown must authorise the use.
For example, the NSW Crown` may have to authorise Sydney University to exploit a
patented invention, and the Queensland Government authorise exploitation by a
University in Queensland.
The effect was stated by the Productivity Commission as:
· The ambiguous definition of the Crown could result in several issues related to the
misuse and misunderstanding of the Crown use provisions.
· Some organisations can be mistaken about whether or not they qualify as the Crown
for the purposes of the Crown use provisions. These organisations may believe they
have immunity from patent infringement actions, when in fact they do not.
· There may be instances where the provisions are misused, compromising the
principles of competitive neutrality. This could occur where bodies gain an unfair
competitive advantage in the marketplace, by invoking the provisions, despite the fact
that they may not have been intended to have access to the provisions.
· Some patent holders may feel obligated to license their inventions when the person
seeking a licence does not in fact have Crown status.
· Some patent holders may not seek infringement remedies that they are in fact entitled
to.
Also that:
· it is evident that there is uncertainty among stakeholders. This could itself be an
impediment to the effective utilisation of Crown use. For example, DOHA noted that
legal advice it had received led it to the conclusion that it was not viable to apply Crown
use to healthcare because:
· the scope of the provisions is unclear
· the ability of the Australian Government to authorise use of a patent by third parties
was doubtful and untested
· the required amount of compensation to the patent holder is unclear.
The Productivity Commission stated in its draft report that the Commission recognises
that stakeholders are likely to remain uncertain about the scope of Crown use, given the
lack of jurisprudence, and that this can limit the effectiveness of the provisions.`
The Productivity Commission report also stated:
The Australian Government (1997) noted that it considered all Crown use to be `public
non-commercial use'. In contrast, ACIP (2005a) observed that the private provision of
previously traditional government services, and the quasi-government status of many
bodies, may lead to Crown use that is not strictly `public non-commercial'. It was
specifically concerned that:
· exploiting the provisions for commercial use has the potential to undermine confidence
in the patents system
· unauthorised use has the potential to financially damage patent holders
12
· the lack of obligations on governments increases uncertainty for businesses.
Need to improve transparency and accountability
The Productivity Commission considered that there was insufficient transparency and
accountability in Crown use in three main areas:
insufficient certainty in the definition of the Crown and that there was the need
for Ministerial oversight (dealt with above);
insufficient certainty regarding the exercise of Crown use and its relationship to
patentee negotiation (including knowing when and why it was used); and
insufficient certainty regarding remuneration structures for Crown use.
The current provisions do not require the Crown to attempt to negotiate or provide
reasons for invoking Crown use.
The problems with this approach are that:
it can significantly disadvantage the patent holder, is inconsistent with notions of
natural justice and could place the patent holder in a situation where threat of
Crown use could be used as a negotiating tactic to reduce licence fees;
it means that the opportunity for a better outcome through negotiation is forgone;
it is not consistent with the practice applying to compulsory licences; and
in the view of ACIP it is inconsistent with the TRIPS agreement.
These issues are explored further below.
ACIP2 argued that:
a patent holder needs information concerning the exploitation as soon as possible
in order to minimise any commercial losses arising from the exploitation, and to
ensure other related business decisions can be made with certainty;
Crown entities should be forthright, open and transparent; and
patent holders should not be burdened with the expense of costly court
proceedings simply to obtain information about whether the Crown is or has
been exploiting their patents.
The Productivity Commission viewed voluntarily negotiated licences as generally
generating superior outcomes to non-voluntary mechanisms. In support of this, the Law
Council of Australia, in evidence to the Productivity Commission, has argued that a
voluntary outcome was superior for the licensee, because the agreement could
2
ACIP (Advisory Council on Intellectual Property) 2005, Review of Crown Use Provisions for Patents
and Designs, Australian Government, Canberra
13
incorporate other knowledge of the patentee and thus be better adapted to the licensee`s
needs than a narrow compulsory licence to work the patented invention`.
Commercial entities seeking a compulsory licence are required to negotiate. Requiring
the Crown to adopt a similar practice would seem to be a reasonable requirement with
potential beneficial outcomes for both the Crown and patent holder.
ACIP3 has expressed a view that the lack of a requirement to first attempt to reach a
negotiated outcome means that the Crown use provisions are inconsistent with the
TRIPS agreement. In particular, Article 31(b) of the TRIPS agreement only waives this
requirement in cases of national emergency or other circumstances of extreme
urgency`.
OBJECTIVE OF GOVERNMENT ACTION
There are two key objectives of Government action:
maintain the appropriate balance of the interests of patent holders and the broader
community allowing governments to intervene in the market if the needs of the
community are not being met; and
have efficient and effective Crown use provisions that have the appropriate levels of
transparency, accountability and flexibility in the rare cases Crown use is needed.
OPTIONS THAT MAY ACHIEVE THE OBJECTIVE
Options may be broadly grouped as follows:
Option 1: Status Quo - No changes to the Act.
Under this option, no action would be taken and the existing provisions
relating to Crown use would be unchanged.
Option 2: Implement Recommendations 7.1 and 7.2 of the Productivity
Commission`s Report Compulsory Licensing of Patents, March 2012.
Under this option the Act would be amended to:
- make it clear that Crown use can be invoked for the provision of a service
that the Australian, State and/or Territory Governments have the primary
responsibility for providing or funding
- require the Crown to attempt to negotiate use of the patented invention
prior to invoking Crown use
- require the Crown to provide the patentee with a statement of reasons no
less than 14 days before such use occurs
- require Crown use to be approved by a Minister (the relevant Federal
Minister or State Attorneys General)
3
ACIP (Advisory Council on Intellectual Property) 2005, Review of Crown Use Provisions for Patents
and Designs, Australian Government, Canberra
14
- require that in instances of Crown use, the patentee is entitled to
remuneration determined on the same basis as that for a compulsory
licence.
The second and third requirements could be waived in emergencies. However, in
all cases patentees would be provided with immediate notice that their patents
have been used, and a statement of reasons as soon as practical thereafter.
The requirement to attempt to negotiate use of the patented invention prior to
invoking Crown use may to lead to unacceptable delays in the availability of the
patented technology. This will be alleviated through legislative provisions which
will clarify expectations, and limit the scope for vexatious legal action.
These two options are considered in more detail below.
IMPACT ASSESSMENT
Who would be affected by each option?
The groups which would be impacted by each of these options are, broadly speaking:
Patent holders (This group will be taken to include applicants for patent
rights whose applications have not yet been determined.)
The Commonwealth Government and State and Territory Governments
The broader community, including consumers.
Impacts of each option
The anticipated impacts of the options are outlined below.
Option 1: No change
Under this option, no action would be taken and the existing provisions relating to
Crown use would be unchanged. In this scenario, the lack of clarity identified by the
Productivity Commission about what entities can actually invoke Crown use would
continue. Furthermore there would be no requirements for any approval of Crown use or
for governments to negotiate with patentees prior to invoking Crown use. No further
guidance on remuneration would be given to the patentee other than that currently
provided in section 165 of the Act, which requires terms to be negotiated between the
parties or determined by a prescribed court.
Patent Owners
The current level of uncertainty and the perception of lack of transparency around
Crown use will remain. These uncertainties may mean that the threat of Crown use
could be used in negotiations to obtain favourable terms during negotiation of other sorts
of licensing.
15
Governments
Maintaining the status quo will preserve the government`s ability to access patented
inventions where necessary. This could include access to healthcare technology that is
required to treat a pandemic.
The uncertain scope of the Crown may mean some entities mistakenly believe that they
are able to invoke Crown use. Others could be reluctant to invoke Crown use on the
mistaken belief that it does not apply to them.
Broader Community
The status quo allows governments to provide services to the public by using patented
inventions when justified.
The possibility of over use of Crown use could lead to a lack of supply of patented
technologies in Australia. In reality the low level of Crown use historically means that
this is an unlikely outcome.
Option 2: Implement the Productivity Commission`s recommendations
7.1 and 7.2
Under this option, the Patents Act 1990 would be amended to clarify that the Crown use
provisions can be invoked for the provision of services that the Australian, State and/or
Territory Governments have the primary responsibility for providing or funding.
Currently, non-government bodies require authorisation by the Commonwealth or a
State to undertake Crown use. The authorisation must be in writing, but may be given
before or after any act for which the authorisation is given has been done. Option 2
clarifies the circumstances in which Crown use can be invoked, but requires Ministerial
approval.
This is likely to lead to a more effective application of Crown use. Providers of
Government services will be clearer that Crown use is a potential remedy to
inappropriate patent holder behaviour. Ministerial consideration will ensure that Crown
use is only invoked where the benefits outweigh the costs and will help avoid vexatious
actions.
The Act would also be amended to require:
i. the Crown to attempt to negotiate use of the patented invention prior to
invoking Crown use
ii. the Crown to provide the patentee with a statement of reasons no less
than 14 days before such use occurs
iii. Crown use to be approved by a Minister (the relevant Federal Minister or
State Attorneys General)
iv. that in instances of Crown use, the patentee is entitled to remuneration
determined on the same basis as that for a compulsory licence.
The first two requirements could be waived in emergencies. However, in all cases
patentees would be provided with immediate notice that their patents have been used,
and a statement of reasons as soon as practical thereafter.
16
The legislative requirement for the Crown to attempt to negotiate with patentee prior to
invoking Crown use improves transparency and accountability. This would impose on
the Crown similar requirements as those that apply to commercial entities seeking a
compulsory licence.
The new requirements allow increased oversight ensuring that Crown use is invoked
appropriately. It may increase administrative burden to government bodies and
departments, but the increased clarity and transparency regarding Crown use is likely to
enhance the Crown`s ability to meet the needs of the public in the rare circumstances
Crown use is invoked.
Providing clarification that reasonable remuneration will apply should reduce the
likelihood that the matter will need to be resolved in court proceedings which could be
expensive for both parties.
Patent Owners
A legislative requirement to negotiate with the patentee prior to invoking Crown use
means that a patent holder can negotiate a reasonable outcome in relation to their
interests using the required statement of reasons in addition to any outcome resulting
from routine negotiations with the Crown. As argued by ACIP4, some of the benefits of
the requirement to negotiate are that:
· a patent holder needs information concerning the exploitation as soon as possible
in order to minimise any commercial losses arising from the exploitation, and to
ensure other related business decisions can be made with certainty;
· Crown entities should be forthright, open and transparent; and
· patent holders should not be burdened with the expense of costly court
proceedings simply to obtain information about whether the Crown is or has
been exploiting their patents.
A requirement to provide a statement of reasons provides the patentee with an
opportunity to have the decision to use their invention properly explained. The patentee
could then decide whether to exercise their right to have their decision reviewed. The
notice of 14 days provides the patentee time to consider the statement before
exploitation occurs.
In emergencies the Crown is not obliged to attempt to negotiate or issue a statement of
reasons prior to intended use. However in all cases the patentee will be issued with
immediate notice that their patents have been used, and will be entitled to pursue their
review rights available under the law, albeit after the Crown has exploited the relevant
invention.
The requirement for Ministerial approval provides an important check on vexatious
claims and provides the Crown with the opportunity to consider the costs and benefits of
invoking Crown use. Patent owners are also not exposed to the threat of crown use
arising from lack of clarity of its application or the approval process.
4
ACIP (Advisory Council on Intellectual Property) 2005, Review of Crown Use Provisions for Patents
and Designs, Australian Government, Canberra
17
Amendments that specify in instances of Crown use the patentee is entitled to
remuneration determined on the same basis as that for a compulsory license are designed
to apply a standard of remuneration to Crown use and align it with that for compulsory
licensing. Providing clarification that reasonable remuneration will apply should reduce
the likelihood that the matter will need to be resolved in court proceedings, which could
be expensive for both parties. The Productivity Commission considered that aligning the
remuneration requirements for Crown use with those for compulsory licensing would
ensure the patent owner obtained a return on investment commensurate with the
regulatory and commercial risks involved. It would also help develop jurisprudence over
remuneration conditions and harmonise Crown use with international agreements such
as the TRIPS Agreement and the Australia-United States Free Trade Agreement.
Governments
The requirement to negotiate with the patentee prior to invoking Crown use could mean
a superior outcome for government because the agreement could incorporate other
know-how of the patentee.
There is a risk that this could lead to unacceptable delays in the availability of the
patented technology. This risk can be ameliorated by drafting legislative provisions to
make expectations clear and to limit the scope for vexatious legal action. In addition,
in the case of emergencies, the requirement for negotiation is waived. While there
would be some small costs involved in a negotiation, any costs would be inconsequential
compared to those resulting from a protracted legal dispute.
The requirement to provide a patentee with a statement of reasons could benefit
government by guiding future decisions, helping create principles and standards of
operation, and over time decreasing disputes. This would also ensure that Governments
carry out due diligence before implementing Crown use.
The requirement for Ministerial approval will enable the Government to consider the
costs and benefits of invoking Crown use. This may add some administrative burden for
governments departments. However, this will not impact on the ability of the Crown to
address the needs of the public. The low historical use of Crown use provisions
indicates that the benefits from Ministerial approval will outweigh any additional
administrative burden.
The requirements in relation to remuneration should help avoid the involvement of
courts in reaching agreement on just terms which could be costly to both parties.
There is a concern that the Crown use provision may be invoked by Governments after
the patented invention has been utilised without awareness of an existing patent. In these
circumstances, there would be no prior negotiation with the patentee, nor would a notice
of intended use be provided to the patentee. Such cases are likely to be rare and most
likely to only arise in emergencies where there is strong public benefit.
Broader Community
The clarification of Crown use provisions ensures that it can be invoked when there is a
public need in rare cases where patents lead to Australians being denied reasonable
access to technologies. The clarification also better adapts Crown use to increasingly
diverse delivery models of government services.
18
The requirement to negotiate with the patent owner prior to use, and any potential
disputes arising from this process, could delay access to the patented invention to the
broader community. This can be mitigated by legislative provisions which clarify
expectations on both sides and which limit the prospect of vexatious legal action. In
addition, in the case of emergency the requirement to negotiate is waived enabling the
Crown to act quickly to respond to emergency public health concerns such as
pandemics.
In summary, the Productivity Commission`s recommendations concerning this option
attempt to strike a balance between the public interest requirement and the interests of
patent owners to be able to exploit their patented inventions. The improved clarity
around the application of Crown use and greater transparency and accountability when it
is applied should lead to a more effective use of the Crown use provisions.
CONSULTATION
The consultation process
There has been extensive consultation on the issue of Crown use through the
Productivity Commission`s Inquiry into the Compulsory Licensing of Patents.
On 29 June 2012, the Assistant Treasurer asked the Productivity Commission to
undertake an inquiry into the compulsory licensing provisions in the Patents Act 1990.
The purpose of the inquiry was to assess, advise and recommend on the impacts and
mechanisms of compulsory licensing invoked by the Patents Act`s public interest and
anti-competitive safeguard. In undertaking the inquiry, the Commission was to have
regard to recent changes to the intellectual property system reflected in the Intellectual
Property Laws Amendment (Raising the Bar) Act 2012 (Cwlth), and the range of
international approaches.
Following receipt of the terms of reference, the Commission placed notices in the press
and on its website inviting public participation in the inquiry. Information about the
inquiry was also circulated to people and organisations likely to have an interest in it.
The Commission released an issues paper in August 2012 to assist inquiry participants
with preparing their submissions. The Commission received 35 submissions from
organisations and individuals representing the legal and patent attorney profession, the
medical and pharmaceutical sector (including manufacturers of generic
pharmaceuticals), the research sector, academia, public interest groups, large public
companies, and government organisations.
The Commission then released a draft report on 14 December 2012, and further
submissions were invited. The Commission received 16 post-draft submissions.
The Commission held public hearings in Melbourne on 20 February 2013.
Representatives from the Public Health Association of Australia, Medicines Australia
and academia attended the hearings.
The final report was sent to Government on 28 March 2013.
19
Views expressed during the consultation process
The Productivity Commission noted that inquiry participants were generally supportive
of the role that Crown use plays, particularly in the case of healthcare. Nevertheless,
some participants were concerned that routine use of the provisions could undermine
confidence in the patents system, and that they therefore should only be invoked in
exceptional circumstances.
The Productivity Commission`s draft recommendation 7.2 addressed transparency and
accountability issues around Government use of Crown use provisions, specifically by
amending the Patents Act 1990 to require that:
the Crown should attempt to negotiate use of the patented invention prior to
invoking Crown use;
instances of Crown use should be approved by a Minister and the patentee be
provided with a statement of reasons no less than 14 days before such use occurs;
and
the patentee is entitled to remuneration determined on the same basis as that for a
compulsory licence.
Alphapharm (a major generic drug manufacturer) disagreed with this proposal on the
basis that mandating negotiation with the patentee prior to invoking Crown use:
could have significant military and security implications that have not been fully
considered;
could significantly elevate the obligations on Commonwealth and State
governments above those stipulated in the Australia-US Free Trade Agreement;
and
could encourage the patentee to introduce delaying tactics and litigation.
In contrast, Medicines Australia (the peak body representing non-generic medicines
suppliers in Australia) indicated that they were very comfortable with the draft
recommendation.
How stakeholders' views have been taken into account
The Productivity Commission took account of stakeholder views in its report, but noted
that Crown use should continue to be an option, irrespective of whether there is an
emergency, if a patented invention is not available to the Australian community on
reasonable terms and conditions. At the same time, the Commission noted that
governments using the Crown use provisions should ensure that the benefits of use
outweigh the costs.
In relation to its recommendation 7.2, the Commission noted that disclosure of reasons
would encourage the Minister to reflect more carefully on the decision and be more
diligent in authorising instances of Crown use. The reasons could also guide future
decisions, help create principles and standards of operation, and over time decrease
disputes. In addition, the measures in recommendation 7.2 would harmonise aspects of
compulsory licensing and Crown use.
The Commission concluded its arguments by stating that the measures are warranted
because governments should be held to higher standards of transparency and
accountability than currently exist.
20
Issues such as compliance with treaty provisions have been taken into account through
standard governmental processes.
CONCLUSION AND PREFERRED OPTION
In contrast to option 2, option 1 does not provide certainty about what Crown use can be
used for, that is whether:
- Crown use can be utilised by non-government healthcare providers, given that it can
only be used for the services of` a government;
- Crown use can be utilised by State Governments for services outside the state; and
- State Governments have to invoke Crown use individually, rather than coordinate their
actions.
Nor does option 1 provide the desired transparency and accountability. Therefore option
1 would not meet the Government`s objective of maintaining an appropriate balance of
the interests of patent holders and the broader community and allowing governments to
intervene in the market if the needs of the community are not being met.
The proposed option 2 provides clarity concerning the application of Crown use and
strengthens transparency and accountability around the exercise of Crown use
provisions.
Under option 2, the requirement to negotiate with the patent owner prior to use, and any
potential disputes arising from this process, could delay access to the patented invention
to the broader community. This can be mitigated by legislative provisions which clarify
expectations on both sides and which limit the prospect of vexatious legal action. In
addition, in the case of emergencies the requirement to negotiate is waived enabling the
Crown to act quickly to respond to situations such as pandemics.
Option 2 maintains the appropriate balance of patent holder and broader community
interests. It also allows governments to intervene in the market if the needs of the
community are not being met, with appropriate levels of transparency, accountability
and flexibility in the rare cases Crown use is needed.
It is therefore recommended that option 2 be endorsed.
IMPLEMENTATION AND REVIEW
Amendments to the Act would be required to implement the preferred option for
invoking the Crown use provisions for a patented invention.
21
REGULATION IMPACT STATEMENT
Export of Patented Pharmaceuticals to Countries Experiencing a
Health Crisis
BACKGROUND
Intellectual property and access to medicines
1. Intellectual property rights provide businesses with the incentive to invest in new
technologies, products and services because they enable them to prevent others from
copying their ideas. Consumers benefit by having access to new products, services and
trusted brands. The patent system is a key element in the intellectual property system. It
encourages business to invest in innovation by providing innovators with exclusive right
to commercialise their inventions, or authorise another person to do so.
2. The patent system is particularly important for encouraging innovation in the
pharmaceutical sector, as the development of new pharmaceutical products involves
high costs and risks. Without patent protection, many vital new pharmaceuticals would
not be made available to the public. However, the basic costs of production and the need
for innovators to obtain a return on their investment can limit access to these products in
the developing world due to their high costs.
3. Much of the world`s population is suffering from treatable diseases, with over 100
countries currently experiencing one or more serious epidemics.5 In 2009, an estimated
272 million people were infected with malaria, HIV/AIDS or tuberculosis, causing 3.9
million deaths.6
4. Many of the countries that are suffering such epidemics are developing or least-
developed countries with limited resources and manufacturing capabilities. Such
countries have difficulty obtaining and distributing the necessary medicines. The United
Nations estimates that nearly two billion people lack access to essential medicines.7
5. There are a number of mechanisms to help developing and least-developed
countries obtain affordable medicines. For example:
o Some pharmaceutical companies provide essential medicines at low or not-for-
profit prices (price differentiation), or grant voluntary licences to other
manufacturers to produce generic versions. Sectors of the biotechnology industry
have committed to exploring further strategies for expanding access to medicines
in the developing world.8 For example, ViiV Healthcare, an HIV/AIDS
5
World Health Statistics 2010`, World Health Organization, 2010, Part II Global Health Indicators, Table
3.
6
World Malaria Report 2010`, World Health Organization, 2010; `UNAIDS Report on the Global AIDS
Epidemic 2010`, UNAIDS, 2010; Global Tuberculosis Control 2010`, World Health Organization, 2010.
7
Human Rights Guidelines for Pharmaceutical Companies in relation to Access to Medicines`, published
in the report to the General Assembly of the United Nations Special Rapporteur on the right to the highest
attainable standard of health`, United Nations document A/63/263, 11 August 2008.
8
Options for Increasing Access to Medicines in the Developing World`, Biotechnology Industry
Organization, policy statement May 2010.
22
pharmaceutical company set up by GlaxoSmithKline and Pfizer, provides
manufacturers of generic pharmaceuticals with a royalty-free voluntary licence
to all its current and future healthcare products, for supply to a wide range of
countries.9
o UNITAID is an international medicine purchasing facility administered by the
World Health Organization. It provides funding for the purchase of medicines
and for research and development relevant to diseases that disproportionately
affect people in developing countries. UNITAID has also established the
Medicines Patent Pool to obtain licences from multiple patent owners to
encourage innovation and lower costs for key HIV/AIDS treatments.10
o The Global Fund to Fight AIDS, Tuberculosis and Malaria is a major
public/private partnership that raises and disburses funds to prevent and treat
these diseases. Australia is a Global Fund Board member and has pledged $135
million to the fund.11
o The William J. Clinton Foundation provides funding for the treatment of
HIV/AIDS, malaria and tuberculosis. Under a partnership with the Foundation,
Australia has provided a total of $25 million over the last four years to improve
the delivery of HIV/AIDS treatment and care in the Asia Pacific region.12
o Humanitarian organisations such as the International Red Cross Red Crescent
Movement, Medecins sans Frontieres and UNICEF source and administer vital
medicines to countries in need.
TRIPS Agreement
6. Another mechanism for helping countries access vital medicines is provided under
the patent system. The World Trade Organization (WTO) Agreement on Trade-Related
Aspects of Intellectual Property Rights (the TRIPS Agreement) sets out the minimum
requirements for intellectual property protection for WTO Member states. Australia is a
signatory to the TRIPS Agreement and complies with its provisions.
7. Article 31 of the TRIPS Agreement enables a country that is experiencing a
serious epidemic to ensure that its population is supplied with a patented treatment. It
provides that a patented product may be used without the authorisation of the patent
owner, but only under certain conditions. These conditions include the following:
(b) such use may only be permitted if, prior to such use, the proposed user has
made prior efforts to obtain authorisation from the right holder on reasonable
commercial terms and conditions and that such efforts have not been successful
within a reasonable period of time. This requirement may be waived by the
9
ViiV Healthcare announces further initiatives to improve access to HIV medications for people living in
the least developed countries`, ViiV Healthcare media release, 16 July 2010.
10
The Medicines Patent Pool Initiative`, UNITAID, viewed 16 November 2010 at
.
11
Australia`s Global HIV/AIDS Initiative`, AusAID, viewed 5 August 2011 at
12
AusAID-Clinton Foundation Partnership`, AusAID, viewed 5 August 2011 at
.
23
Member in the case of a national emergency or other circumstances of extreme
urgency.
...
(f) any such use shall be authorised predominantly for the supply of the domestic
market of the Member authorising such use;
...
(h) the right holder shall be paid adequate remuneration in the circumstances of
each case, taking into account the economic value of the authorisation.
8. Under this provision, a court may order a patent owner to grant to a third party a
compulsory licence to manufacture and supply a pharmaceutical and ensure that the
patent owner is compensated accordingly.
Doha Declaration
9. Prior to 2001, there was uncertainty over the interpretation of Article 31. In
particular, paragraph (f) prevents products that are produced without the authorisation of
the patent owner from being exported in significant quantities. This has the potential to
prevent WTO Members that lack the capability to manufacture pharmaceuticals
themselves from importing vital medicines from other Members. There are 4813 least-
developed countries and potentially 10014 developing countries that could fall into this
category. Around 25 of these are in the Asia-Pacific region.
10. In November 2001, the Fourth WTO Ministerial Conference in Doha, Qatar,
adopted the Declaration on the TRIPS Agreement and Public Health (the Doha
Declaration).15 The Declaration recognised the following:
o The gravity of the public health problems afflicting many developing and least-
developed countries, especially those resulting from HIV/AIDS, tuberculosis,
malaria and other epidemics.
o WTO Members have the right to use the provisions of the TRIPS Agreement to
support public health by promoting access to medicines for all.
o WTO Members with insufficient manufacturing capacities in the pharmaceutical
sector could find it difficult to use the compulsory licensing provisions under the
TRIPS Agreement, and a solution to this problem was needed.
TRIPS Protocol
11. In 2003, the General Council for TRIPS agreed to an interim waiver of paragraphs
(f) and (h) of Article 31 so as to enable pharmaceuticals to be exported under
13
Least Developed Countries - Country Profiles`, United Nations Office of the High Representative for
the Least Developed Countries, Landlocked Developing Countries and the Small Island Developing States
(UN-OHRLLS), viewed 5 August 2011 at < http://www.unohrlls.org/en/ldc/25/>.
14
World Economic Outlook`, International Monetary Fund, April 2010, Table Emerging and
Developing Economies`.
15
Declaration on the TRIPS Agreement and public health`, WT/MIN(01)/DEC/2, 20 November 2001.
24
compulsory licence. In 2005, the TRIPS Protocol16 was drafted to give permanent effect
to the waiver. The main features of the TRIPS Protocol are as follows:
o Only pharmaceutical products that are needed to address the public health
problems afflicting many developing and least-developed countries are included.
o Products may be imported by any least-developed country Member, and any
other Member that has notified of its intention to use the system as an importer.
Before products may be obtained, the importing country must notify the TRIPS
Council of the details of the shipment and confirm that the country has
insufficient manufacturing capacity for the product(s) in question.
o The proposed licensee must have made prior efforts to obtain authorisation from
the patent owner and such efforts have not been successful within a reasonable
period of time. This requirement may be waived in circumstances of extreme
urgency or public non-commercial use`. Public non-commercial use primarily
means use by a government.
o Certain conditions must be placed on licences granted under the TRIPS Protocol,
primarily to reduce the risk of pharmaceuticals being diverted from their
intended recipients.
o Where a licence is granted, adequate remuneration must be paid to the patent
owner.
12. The aim of the protocol is to encourage patent owners to either practice price
differentiation, and provide medicines to least developed and developing countries in
need at affordable prices, or to issue voluntary licenses to generic manufactures to
provide medicines at affordable prices. If a patent owner is unwilling to do this, then the
protocol provides a mechanism to force the patent owner to issue a compulsory license.
13. Several jurisdictions around the world have amended their legislation to permit the
export of pharmaceutical products under the system. To date, only one licence has been
granted under the system. This was in Canada in 2007. Some of the suggested reasons
for the low level of use are as follows:17
o Implementation of the system has been too complicated and places too high a
burden on applicants for a licence and importing countries. For example,
Canada`s largest manufacturer of generic medicines, Apotex, has indicated it
would make a lower cost version of a key AIDS medicine for export if Canada`s
law were streamlined, such as by only requiring a single licence for a product,
regardless of the quantity of medicine required over time.
o Least developed-countries are not bound by the TRIPS Agreement to protect
patents until 2016 and so have no need to use the TRIPS Protocol.
16
Amendment of the TRIPS Agreement`, WT/L/641, 8 December 2005.
17
Report 86: Treaties tabled on 27 March and 9 May 2007`, Joint Standing Committee on Treaties,
Chapter 9 Protocol amending the TRIPS Agreement (Geneva, 6 December 2005), August 2007; Report
on the Statutory Review of Sections 21.01 to 21.09 of the Patents Act`, Industry Canada, 2007; Canada`s
Access to Medicines Regime`, Canadian HIV/AIDS Legal Network, viewed 5 August 2011 at <
http://www.aidslaw.ca/EN/camr/index.htm>.,
25
o Developing and least-developed countries lack awareness of the TRIPS Protocol,
and the knowledge and resources necessary to use it.
Australia's acceptance of the TRIPS Protocol
14. In 2006 and 2007, the Department of Foreign Affairs and Trade (DFAT) consulted
with the general public and other Government agencies on Australia accepting the
TRIPS Protocol. In 2007 the Joint Standing Committee on Treaties (JSCOT) conducted
an inquiry into Australia accepting the Protocol. JSCOT supported the Protocol and
recommended that binding treaty action be taken. It urged the Government to actively
support the provision of patented medicines to least-developed and developing countries
and supported any necessary amendments to the Patents Act 1990 to allow for
compulsory licensing to enable the export of cheaper versions of patented medicines.
JSCOT encouraged IP Australia to coordinate the consultation process on implementing
the Protocol.18
15. The Government accepted JSCOT`s recommendation and Australia accepted the
terms of the Protocol on 12 September 2007. IP Australia commenced consultations on
implementing the Protocol in 2009. Accepting the Protocol means that Australia accepts
the additional flexibility in the TRIPS Agreement and that countries have the legal right
to use the system if they choose to do so. It does mean that Australia is required to
implement the TRIPS Protocol through its own laws.
PROBLEM
16. As outlined above, problems exist in ensuring that vital medicines are made
available at affordable prices to people in least-developed and developing countries. In
particular, issues arise where medicines are under patent, as some patent owners have
shown themselves unwilling to practice price differentiation or to issue voluntary
licenses to generic manufacturers to the necessary extent.
17. In particular problems exist because the TRIPS Agreement as it stands does not
enable WTO Members such as Australia to export pharmaceuticals under compulsory
licence to another country. As a result member countries with the capacity to
manufacture vital medicines are unable to export them to developing and least-
developing countries that lack the capacity to manufacture these medicines. The TRIPS
Protocol was designed to address this problem by enabling WTO Members to export
medicines under compulsory licence.
18. The development of the TRIPS Protocol was prompted by a situation in South
Africa which demonstrated the need for a mechanism to ensure that patented essential
medicines can be made affordable to people in least-developed and developing
countries.
19. In the late 1990s, around 20% of adults in South Africa were infected with HIV;
however few could afford the prices charged by the patent owners for treatment. In
1997, the South African government attempted to make use of exemptions in the TRIPS
Agreement, including compulsory licensing, by introducing legislation to over-ride
18
Report 86: Treaties tabled on 27 March and 9 May 2007`, Joint Standing Committee on Treaties,
Chapter 9 Protocol amending the TRIPS Agreement (Geneva, 6 December 2005), August 2007.
26
patents on pharmaceuticals and enable the importation of generic versions. The US
government threatened sanctions against South Africa and in 1998 the Pharmaceutical
Manufacturers Association and 40 international pharmaceutical companies took legal
action against the South African government, arguing that the legislation did not
conform to international agreements.19
20. In March 2001, Cipla Ltd., an Indian manufacturer of generic medicines, applied
to the South African government for a compulsory licence to import HIV/AIDS
medicines into South Africa. Cipla stated that it could sell the medicines to the
government for 40% of the price offered by the patent owners.20 Other Indian
manufacturers made similar offers. As a consequence, patent owners Merck & Co.,
Bristol-Myers Squibb Co. and GlaxoSmithKline (GSK) significantly reduced their
prices.21 Due to pressure from the World Health Organization and other non-government
organisations, in April 2001 the pharmaceutical companies withdrew their legal action.
The Doha Declaration was adopted in November 2001 to clarify that governments are
free under the TRIPS Agreement to ensure access to medicines.
21. However, the price of pharmaceuticals in South Africa continued to be too high. In
2003, the South African Competition Commission ruled that GSK and Boehringer
Ingelheim breached the Competition Act 1998 by refusing to licence their patents to
generic manufacturers in return for a reasonable royalty. The Commission threatened to
issue compulsory licences and so the patent owners agreed to grant voluntary licences
and offered not-for-profit prices on HIV medicines in the country.22 Patent owners`
continuing unwillingness to practice price differentiation without further encouragement
is also demonstrated in a study commissioned by the World Health Organisation and
Health Action International. The 2010 study shows that the continuing high price of
medicines is having catastrophic effects on poor people.23 In the countries studied,
purchasing four commonly used medicines at current prices would push large portions
of the population (up to 86%) below the poverty levels of US$1.25 or US$2.00 per day.
Originator brand products (products still under patent) were significantly less affordable
than the lowest-priced generic equivalents. The report`s recommendations include that
the use of low-cost generic medicines be actively promoted and pharmaceutical
companies be encouraged to differentially price medicines according to markets.
19
Rourmet, Rachel, Access to patented anti-HIV/AIDS medicine: the South African experience`,
European Intellectual Property Review, Vol. 32 No. 3, 2010, pp 137-141; Varella, Marcelo Dias, The
WTO, intellectual property and aids: case studies from Brazil and South Africa`, Journal of World
Intellectual Property, Vol. 7 No. 4, July 2004, pp. 523-547.
20
Swarn, Rachel, AIDS Drug Battle Deepens in Africa`, The New York Times, 8 March 2001, viewed on
5 August 2011 at < http://www.nytimes.com/2001/03/08/health/08AIDS.html>.
21
Schoofs, Mark et al., Price War Breaks Out Over AIDS Drugs in Africa as Generics Present
Challenge`, Wall Street Journal, 7 March 2001, viewed on 5 August 2011 at
.
22
Boseley, Sarah, Ruling opens the door for cut-price HIV drugs`, The Guardian, 17 October 2003,
viewed on 5 August 2011 at ;
Riviere, Philippe, At last, generic anti-AIDS medicine for sub-Saharan Africa`, Le Monde Diplomatique,
December 2003, viewed on 5 August 2011 at ,.
23
Niens, Laurens et al., Quantifying the Impoverishing Effects of Purchasing Medicines: A Cross-
Country Comparison of the Affordability of Medicines in the Developing World`, Public Library of
Science (PLOS) Medicine, 31 August 2010, viewed on 5 August 2011 at
.
27
22. The World Health Organization has stated that price is the most important barrier
to the poor having access to medicines and that the availability of generic products is a
major contributor to reducing the cost of medicines. For example, the prices of first
line` antiretroviral medicines for HIV/AIDS have been reduced from over US$10,000
per patient per year in 2002 to US$100 in 2010 due to competition from generics. This
has enabled a 12-fold increase in poor patients receiving treatment.24
23. Health Action International identified the flexibilities provided by the TRIPS
Agreement, including the TRIPS Protocol, as an important strategy for bringing the
price of vital medicines down and improving the availability and affordability of
essential medicines.25
24. The problem is also likely to become more acute as the number of countries
implementing the TRIPS Agreement increases. Many countries have not implemented
the TRIPS Agreement in part or in full, or have done so only recently, and so have not
provided patent protection for pharmaceuticals. Some of these, such as India, have
traditionally been important producers of generic essential medicines for export to other
countries. The implementation of the TRIPS Agreement in such countries is leading to
the patenting of new medicines. As a result, generic versions of the new medicines may
only become available after the patent has expired. This would significantly reduce the
availability of affordable essential medicines.
25. As a means of addressing this issue, the United Nation`s Millennium Development
Goals Report 2009 recommended that countries with manufacturing capacity should
facilitate the export of generic medicines to countries in need, in line with flexibilities
contained in the TRIPS Agreement (including the Protocol).26 Countries that implement
the TRIPS Protocol are able to export patented medicines under compulsory licence to
countries in need.
Government regulation
26. Compulsory licences to work a patented invention are currently provided for under
Chapter 12 of the Patents Act 1990. These provisions are designed to address the needs
of the Australian public. There is no existing government regulation in Australia to
allow patented pharmaceuticals to be exported under compulsory licence to meet the
needs of another country.
27. Under the current provisions, the Federal Court may order a patent owner to grant
a person a licence if is satisfied that:
o all of the following conditions exist:
24
WHO, WIPO, WTO join forces to put access-to-medicines under the microscope`, WTO, 16 July 2010,
viewed 5 August 2011 at ; Little-
used Par.6` system will have its day, WHO tells intellectual property and health review`, WTO, 27
October 2010, viewed 5 August 2011 at
.
25
Ewen, Margaret, Medicine prices, availability, affordability and price components`, Health Action
International, WHO, WIPO and WTO Joint Technical Symposium, 16 July 2010.
26
'Millennium Development Goals Report 2009`, MDG 8 - Strengthening the Global Partnership for
Development in a Time of Crisis - Target 8e, United Nations.
28
the patentee has failed to exploit the patent and provided no satisfactory
reason for this;
the reasonable requirements of the public` have not been met; and
the applicant for the licence has tried for a reasonable period to obtain
authorisation to work the invention on reasonable terms;
OR
o the patent owner has contravened Part IV of the Trade Practices Act 1974
(relating to restrictive trade practices) or an application law in connection with
the patent.
28. The reasonable requirements of the public are not satisfied if an existing or
emerging trade or industry in Australia is unfairly prejudiced, or the demand for the
invention is not reasonably met, because of the patent owner`s failure to supply the
invention in a reasonable way.
OBJECTIVE OF GOVERNMENT ACTION
29. The key objectives are to:
o ensure that developing and least-developed countries that are experiencing a
health crisis are able to obtain supply of vital medicines in a timely manner on
reasonable terms.
o support and encourage innovation, investment and international competitiveness.
o maintain existing budget expenditure on foreign aid.
OPTIONS THAT MAY ACHIEVE THE OBJECTIVE
30. Options may be broadly grouped as follows:
o Option 1: No change.
Under this option, no action would be taken and developing countries that need
to obtain vital medicines would source them from countries that have
implemented the TRIPS Protocol, or some other means.
o Option 2: Amend the Patents Act 1990 to enable the Federal Court to grant and
amend licences under the TRIPS Protocol.
Under this option, the current compulsory licence provisions in the Act would be
amended to enable the Federal Court to grant and amend licences to export
patented pharmaceuticals in accordance with the TRIPS Protocol. Eligible
developing countries would then be able to source affordable medicines from a
manufacturer of generic pharmaceuticals in Australia.
o Option 3: Amend the Patents Act 1990 to enable the Commissioner of Patents to
grant and amend licences under the TRIPS Protocol.
29
This option is similar to Option 2, except that the Commissioner of Patents
would be given the power to grant and amend licences in accordance with the
TRIPS Protocol.
o Option 4: Increase funding for aid programs that involve the delivery of
pharmaceuticals to developing countries.
Under this option, Australia`s current funding of programs that include the
provision of pharmaceuticals to other countries would be increased.
31. There a number of possible ways that the TRIPS Protocol may be implemented.
Options 2 and 3 have been determined to be the two most appropriate options for
implementing it in Australia. This has been based on consultation with stakeholders and
analysis of the systems implemented in other countries. Some of the variations that are
available are discussed below.
Power to grant licences
32. As shown in Options 2 and 3, the power to grant licences may lie with a
government official, such as the Commissioner of Patents, or with the courts. The
potential advantage of a government official having the power is that it may provide a
cheaper and more informal application process. The experience of countries such as
Canada27 and India28 that have given the power to a government official is that it does
not ensure a less onerous and bureaucratic process. The main potential advantage of the
courts having the power is a more streamlined system that builds on existing processes
and expertise. The Government has been actively considering both options.
Limitations on licences
33. Licences may be limited to a maximum duration and a set amount of product, so
that if further time or medicines are needed a new application must be lodged. The main
advantage of this is that it provides certainty to patent owners. However, jurisdictions
that have implemented this approach have been heavily criticised for the extra costs and
delays it places on generic manufacturers and countries in need.29 Alternatively, the
authority with the power to grant licences may have the power to amend existing
licences so as to accommodate changing circumstances. The Government prefers the
latter approach for Options 2 and 3 as this better meets the humanitarian objectives of
the system, while protecting the rights of patent owners.
Prior negotiation
34. A requirement for the grant of a licence may be that prior efforts have been made
to seek a voluntary licence from the patent owner on reasonable terms and conditions,
and that such efforts have not been successful within a reasonable or specified period.
27
Rimmer, Matthew, A Submission to the Joint Standing Committee on Treaties`, May 2007, viewed on
5 August 2011 at .
28
Matthews, Duncan, From the August 30, 2003 WTO Decision to the December 6, 2005 agreement on
an amendment to TRIPS: improving access to medicines in developing countries?`, Intellectual Property
Quarterly, No.2, 2006, pp 121-122.
29
Canada`s Access to Medicines Regime`, Canadian HIV/AIDS Legal Network, viewed 5 August 2011
at < http://www.aidslaw.ca/EN/camr/index.htm>.
30
This approach has been strongly criticised by non-government organisations and the
generic pharmaceutical industry as one of the greatest obstacles to the uptake of the
system by developing countries.30 An alternative is to waive the requirement in the case
of national emergency or circumstances of extreme urgency in the importing country.
The Government prefers the latter alternative for Options 2 and 3 as it ensures that the
system is better able to address urgent circumstances. Attempts to seek a voluntary
licence would still be required in non-urgent situations, such as where the health
situation is not expected to escalate with serious consequences in the near future.
Eligible products and importers
35. The pharmaceutical products eligible to be imported under the system, and the
countries eligible to import the products, may be predetermined and set out in the
implementing legislation. This approach has been supported by the innovative
pharmaceutical due to the certainty it provides, but criticised by non-government
organisations and generic manufacturers as too inflexible.31 An alternative approach is
for eligibility to be determined on a case-by-case basis. The Government prefers the
latter approach for Options 2 and 3 because it is better able to adapt to the needs of
developing countries.
IMPACT ASSESSMENT
Who would be affected by each option?
36. The groups that would be impacted by each of these options are, broadly speaking:
o Developing and least-developed countries
o Owners of Australian patents for pharmaceutical products
o Australian manufacturers of generic pharmaceutical products
o Government
o Australian public.
What would be the effects of each option?
37. The anticipated impacts of the options are outlined below.
Option 1: No change
38. This option maintains the status quo. Australia would not implement the TRIPS
Protocol, despite accepting it in 2007. Countries in need would have to source affordable
pharmaceuticals from other countries that have implemented the TRIPS Protocol or by
other means. As outlined above, this includes humanitarian organisations and
30
Report on the Statutory Review of Sections 21.01 to 21.09 of the Patents Act`, Industry Canada, 2007,
pp.14-15.
31
Report on the Statutory Review of Sections 21.01 to 21.09 of the Patents Act`, Industry Canada, 2007,
pp.7-11.
31
pharmaceutical companies that make their products available and affordable through the
use of price discrimination.
Costs
39. WTO Members that have implemented the TRIPS Protocol comprise the European
Union, Norway, The Netherlands, Switzerland, Canada, China, India and South Korea.
As noted above, the implementation of the TRIPS Protocol in some of these countries
have been criticised as being too burdensome on applicants and importing countries.
Few developing countries have sought to use these systems and this is likely to continue.
Also, as demonstrated above, patent owners are not making their products sufficiently
affordable to those in need. As a consequence, the main burden would fall on
humanitarian organisations and there would be no increase in the supply of
pharmaceuticals. Also, developing countries that have an established aid relationship
with Australia, particularly those in the Asia-Pacific region, would not be able to take
advantage of this relationship when seeking to use the TRIPS Protocol. Examples
include East Timor, Papua New Guinea, Indonesia, Solomon Islands, Bangladesh and
Burma.
40. The status quo involves no direct costs to the Australian Government or the
public. However, the absence of another avenue for supplying pharmaceuticals to
developing countries in the Asia-Pacific region may lead to an increase in infection and
death rates in those countries and indirect costs to Australia. Also, the Government
could be criticised for accepting, but not implementing, the TRIPS Protocol.
Benefits
41. This option avoids the potential for patent rights to be infringed by
pharmaceuticals being diverted from their intended recipients and sold illegally in
developed countries.
Option 2: Amend the Patents Act 1990 to enable the Federal Court to
grant licences under the TRIPS Protocol
42. Under this option, the Federal Court`s current powers under the Patents Act to
grant compulsory licenses would be extended so as to implement the TRIPS Protocol in
a simple and effective manner. The Court would have the power to grant and amend
TRIPS Protocol licences. Court hearings and decisions would be progressed quickly in
urgent cases. The Court would determine whether a licence should be granted, the
conditions on the licence and, where the applicant and the patent owner can not reach
agreement, remuneration. Licences may be granted in respect of patents owned by
domestic or foreign entities.
43. This option would enable the export of pharmaceuticals from Australia to
countries that are experiencing a health crisis and that lack the capacity to manufacture
the pharmaceuticals themselves. Also, as evidenced by the experience in South Africa
and other countries, the threat of a compulsory licence being granted would encourage
patent owners to agree to a voluntary licence. Option 2 would be consistent with the
Government`s foreign aid objective of assisting developing countries to reduce poverty
32
and achieve sustainable development.32 It would also be consistent with the
Government`s increased focus on aid effectiveness and mutual accountability, rather
than simple increases in aid funding. This involves country-owned and country-led aid
responses, and use of local systems.33
44. A number of Australian pharmaceutical companies have the potential to
manufacture generic medicines for export under the TRIPS Protocol or to have a licence
granted in respect of a patent they own. The broader Australian pharmaceutical industry
comprises:34
o over 40 originator companies, most of these subsidiaries of multi-national
companies);
o up to 10 generic companies;
o 470 small-scale biotechnology companies, and
o over 20 major medical research institutes.
45. The broader industry has a total annual turnover of over $20 billion and employs
over 40,000 people, with one third in the manufacturing sector. It sells over $11 billion
worth of medicines domestically each year and over $4 billion in exports, making
medical and pharmaceutical products Australia`s largest manufactured export.35 In 2007-
08, over $700 million was spent on research and development on human use
pharmaceuticals.36
46. The 40 originator companies are responsible for almost 80% of all domestic sales
and around two-thirds of exports, with the majority of the remainder from the
manufacturers of generic medicines. The export destinations include Asia, South Africa,
Europe, Canada, New Zealand and South America.37
Costs
47. The system implemented in Australia would be designed to be simpler and easier
to use than some foreign systems. However, due to the low use of the TRIPS Protocol in
other jurisdictions, it is expected that only a small number of applications for a licence
would be made in Australia. Most of the costs listed below would only be incurred
where an application is made.
32
Annual Report 09/10`, Australian Agency for International Development, 2010.
33
Annual Thematic Performance Report: Health 2008-09`, AusAID, June 2010.
34
Pharmaceutical Industry Strategy Group, Final Report`, December 2008.
35
Australian Bureau of Statistics, ABS catalogue 5368.0 International Trade in Goods and Services,
Australia`, Table 12a. MECHANDISE EXPORTS, Standard International Trade Classification (1 and 2
digit), FOB Value, July 2010.
36
Australian Bureau of Statistics, Research and Experimental Development, Businesses`, Catalogue
8104.0.
37
The Australia Pharmaceuticals Industry: Winds of Change. Report of the 2009 Medicines Australia
Member Economic Survey`, Medicines Australia, 2010, pages 5-6; Generic Medicines Industry
Association (GMiA), viewed 5 August 2011 at < http://www.gmia.com.au/gmia_members_
co.html>.
33
48. The potential costs of this option to developing countries and manufacturers of
generic pharmaceuticals would be as follows:
o Acquiring familiarity with the new legislative provision.
o Fees charged by the Federal Court. This would probably total a few thousand
dollars for a corporation in each case.38
o Legal advice and representation. Legal costs could total tens of thousands of
dollars but would vary significantly according to whether there is an attempt to
negotiate a voluntary licence with the patent owner and whether the applicant or
the patent owner appealed the Court`s decision.
o Anti-diversion arrangements such as unique marking and packaging of the
pharmaceuticals. These are difficult to quantify.
o Remuneration paid to the patent owner, which would depend heavily on the type
and quantity of pharmaceutical in each case. As a guide, jurisdictions that have
implemented a specific formula for calculating remuneration have limited it to a
maximum of 4% of the total price paid by the importing country, or on its
behalf.39
49. The potential costs of this option to patent owners include the following:
o Acquiring familiarity with the new provisions.
o Any legal advice and representation. Again, this would vary according to
whether there is an attempt to negotiate a voluntary licence and how contentious
the case is.
o Loss of royalty income due to the Court ordering that a licence be granted at a
price lower than that originally offered to the generic manufacturer.
o Loss of control over pharmaceuticals that are diverted from the intended
recipients. However, the design of the implementation can significantly reduce
this risk.
o Monitoring compliance with any licences granted. Depending on the degree of
risk, this could be in the tens of thousands of dollars.
50. The full impact of Option 2 is uncertain; however there is no evidence of any
perverse outcomes from this option, such as pharmaceutical developers deciding against
entering the Australian market. Patents would remain an effective way for
pharmaceutical developers to obtain a return on their investment because:
the number of licences that would be granted is expected to be small;
38
Federal Court of Australia Regulations 2004, Schedule 1 Fees.
39
Canada`s Access to Medicines Regime - Consultation Paper`, Industry Canada & Health Canada,
2006; Regulation (EC) No 816/2006 of the European Parliament and of the Council of 17 May 2006,
Article 10(9). In Europe the maximum of 4% applies in situations of national emergency only. In all other
cases remuneration is to be determined by the competent authority.
34
patent owners would be compensated for any licences granted, and
measures would be taken to minimise products produced under licence being
diverted to other markets.
51. The cost to government of this option would be the cost of amending and
administering the new legislative provision and resolving any legal disputes that may
arise. There would be no direct costs to the Australian public. However, the threat of
compulsory licences may encourage patent owners to agree to voluntary licences,
thereby creating inefficiency in the transactions of medicines where the TRIPS Protocol
is relevant.
Benefits
52. The main benefit of this option to developing and least-developed countries is an
opportunity to purchase generic pharmaceuticals from Australia, and in a simpler and
more efficient manner than in other jurisdictions which have adopted the TRIPS
Protocol. Pharmaceuticals obtained in this way would supplement those provided
through other means. Countries in the Asia-Pacific region that have an established
relationship with Australia, particularly in regards to receiving humanitarian aid, would
be able to use that relationship to minimise the burden of obtaining pharmaceuticals
under the TRIPS Protocol. This could save them valuable time and money, however the
amount is heavily dependent on specific circumstances and difficult to quantify.
53. The main benefit of this option to Australian manufacturers of generic
pharmaceuticals is the opportunity to meet the immediate needs of developing and least-
developed countries. Again, the amount would depend on specific circumstances.
54. This option would have no direct benefits to government or the Australian public.
However, an increase in the supply of vital pharmaceuticals to developing countries,
particularly those in the Asia-Pacific region, would be in Australia`s national interest.
55. The total benefits of Option 2 are expected to be limited as the number of
applications is expected to be low.
Option 3: Amend the Patents Act 1990 to enable the Commissioner of
Patents to grant licences under the TRIPS Protocol
56. Under this option, the Commissioner of Patents would be provided with the power
to grant and amend licences under the TRIPS Protocol. The aim of this option would be
to provide a quicker and simpler process than that provided by the Federal Court in
order to minimise the administrative and financial burden on developing countries.
However, the Commissioner`s decision would be appealable to the Administrative
Appeal Tribunal (AAT), in accordance with similar decisions under the Patents Act. IP
Australia does not have the expertise to decide on remuneration, so where the parties can
not reach agreement the issue would be determined by the Federal Court.
35
Costs
57. The costs of this option to developing countries and manufacturers of generic
medicines would be similar to those for option 2. It is expected that applicants would
still use legal representation when making an application, however the fees charges by
IP Australia and the AAT would probably be lower than those charged by the Federal
Court.40 An extra cost under this option would be the potential cost and delay of an
appeal to the AAT and then to the Federal Court. This could be complicated by two
actions occurring concurrently - one to the AAT regarding the Commissioner`s decision
to grant a licence and one to the Federal Court regarding remuneration.
58. Under this option, the costs to patent owners would be similar to those for option
2. However, if the grant of a licence is contentious, it is likely that patent owners would
appeal the Commissioner`s decision in the AAT or the Federal Court, increasing costs
and also delaying the process. It is expected that patent owners would use legal
representation when making an appeal in either fora.
59. The costs to Government would be similar to those under option 2, with the
additional cost of IP Australia developing and maintaining the processes and expertise
necessary to administer the system. There would be no direct costs to the public.
Benefits
60. The benefits of this option to developing countries and manufacturers of generic
medicines are similar to those of option 2 (refer above). However, the process of
applying to the Commissioner of Patents would be simpler and easier than applying to
the Federal Court. Both applicants and patent owners would have the option of
appealing to the AAT. This option would have no direct benefits to the Government or
the Australian public.
Option 4: Increase funding for aid programs that involve the delivery
of pharmaceuticals to developing countries
61. Under this option, Australia would not implement the TRIPS Protocol, despite
accepting it in 2007. Instead, the Government`s funding for aid programs such as the
Global Fund, Three Diseases Fund for Burma and William J. Clinton Foundation would
be increased. As discussed in 1.1 above, these programs currently receive significant
Australian support and include funding for treatments for HIV/AIDS, malaria and
tuberculosis. Using existing programs such as these would be most appropriate way to
increase funding because, due to Australia`s comparative advantage and strategic
priorities, Australia does not normally provide direct assistance for treatment and care.41
62. In 2009-10, Australia spent over $490 million of the aid budget on the health
sector. Priority areas include tackling regional threats such as HIV, malaria and
40
Patents Act 1990, Schedule 7 Fees; Administrative Appeals Tribunal Regulations 1976, Regulation 19.
41
For example, see Intensifying the response: Halting the spread of HIV - Australia`s international
development strategy for HIV`, AusAID, 2009, pages 19-20.
36
emerging infectious diseases.42 Option 4 would involve increasing the level of funding
and would be consistent with current priorities.
Costs
63. This option would involve no costs to developing countries, patent owners or
manufacturers of generic pharmaceuticals. However, there could be significant costs to
the Government and the Australian public, depending on the degree of increase in
funding. This would not meet the objective of maintaining current budget expenditure
on foreign aid. Also, not all of the funding would be targeted towards the supply of
pharmaceuticals, as aid programs usually cover a range of activities, leading to
inefficiencies. The Government could also be criticised for accepting, but not
implementing, the TRIPS Protocol.
Benefits
64. Under this option, developing countries benefit from an increased supply of
pharmaceuticals. Patent owners may benefit through a reduced risk of pharmaceuticals
being diverted from the intended recipients. The Government and the Australian public
would indirectly benefit because a more stable and healthy region is in the national
interest.
CONSULTATION
The consultation process
65. There has been extensive consultation on the implementation of the TRIPS
Protocol. In 2009 and 2010, IP Australia consulted a number of Government agencies on
a proposed model. This included the Department of Innovation, Industry, Science and
Research, the Attorney-General`s Department, the Federal Court of Australia, the
Department of Health and Ageing and the Therapeutic Goods Administration.
66. In April 2010, IP Australia released a public consultation paper seeking views on
the proposed model. The paper was circulated to a wide range of stakeholders, including
the innovator pharmaceutical sector, generic medicine manufacturers, the biotechnology
sector, aid organisations, the legal / attorney profession and academia.
Views expressed during the consultation process
67. Submissions in response to the public consultation paper were received from:
o Medicines Australia, representing the innovative pharmaceuticals sector and
patent owners;
o Australian Manufacturers` Patents, Industrial Designs, Copyright and Trade
Mark Association (AMPICTA), representing patent owners;
o Generic Medicines Industry Association of Australia (GMiA), representing the
generic medicines industry;
42
Annual Thematic Performance Report: Health 2009`, AusAID, January 2011.
37
o Institute of Patent and Trademark Attorneys (IPTA), International Federation of
Intellectual Property Attorneys - Australia (FICPI) and the International
Association for the Protection of Intellectual Property - Australia (AIPPI),
representing the patent attorney profession and patent owners;
o Law Council of Australia - Business Law Section, representing legal
professionals;
o Individual legal professionals, and
o Individual academics.
68. Across all sectors there is strong support for introducing regulation to implement
the TRIPS Protocol in Australia in order to provide another avenue for developing
countries to obtain vital medicines. There was general support for the initial model
proposed by IP Australia, although significant concerns were raised about some aspects.
69. The main concerns of Medicines Australia and legal / patent professionals were:
o the Federal Court of Australia, rather than the Commissioner of Patents, should
have the power to grant, amend and revoke licences under the system. They
believed that IP Australia lacked sufficient expertise and experience to assess
and decide on whether compulsory licences should be granted and the conditions
of any such licence.
o Public non-commercial use` of the pharmaceutical should not be grounds for
waiving the requirement for prior negotiation between the applicant and the
patent owner. This requirement should only be waived in urgent circumstances.
o measures to prevent the diversion of pharmaceuticals from the intended
recipients need to be robust.
70. The generic medicines industry expressed no major concerns with the proposal.
The main concerns of academics were:
o the system needed to be kept simple, quick and free from opportunities for
delaying tactics by innovator companies;
o the legislation should clarify that vaccines are eligible products under the system;
o non-WTO members should not be subject to extra requirements, such as
additional anti-diversion measures, as this would be an unfair burden.
How stakeholders' views have been taken into account
71. In light of stakeholder views, IP Australia has revised the proposed model. The
main changes are as follows:
o The Federal Court of Australia, rather than the Commissioner of Patents, would
have the power to grant, amend and revoke licences.
38
o Where the applicant for the compulsory licence is the Government or a similar
public non-commercial organisation, the applicant must first attempt to obtain a
voluntary licence from the patent owner. This requirement may only be waived
in urgent circumstances.
CONCLUSION AND PREFERRED OPTION
72. Option 2, which proposes amending the Patents Act to enable the Federal Court to
grant licences under the TRIPS Protocol, is the preferred option. This option utilises the
fast track court processes to provide developing and least-developed countries with an
affordable and efficient way to obtain vital medicines from Australia. This option also
ensures that the rights of patent owners are respected and there is no increase to the
foreign aid budget.
73. In contrast, option 1 does not provide developing and least-developed countries
with improved access to vital medicines, particularly those countries in the Asia-Pacific
region with whom Australia has an established relationship. Therefore it does not meet
the government`s objective. Option 3 provides a system for improved access, but one
that is overly complex and more costly if the decision is appealed. Option 4 increases the
supply of pharmaceuticals for developing countries, but in a non-targeted fashion and
with an increase in the foreign aid budget. Also, under options 1 and 4, Australia`s
acceptance of the TRIPS Protocol in 2007 may be criticised as a hollow gesture because
the system is not being implemented in Australia.
74. It is therefore recommended that option 2 be endorsed. However, the
implementation of the TRIPS Protocol will by no means fully address the problem of
affordability of medicines for those suffering chronic poverty or for those living under
ineffective government regimes. Continued maintenance of government aid funding is
therefore justified.
IMPLEMENTATION AND REVIEW
75. Amendments to the Patents Act would be required to implement the preferred
option for implementing the TRIPS Protocol. A provision in the Act would enable
applications for a compulsory licence to be made to the Federal Court. The Court would
consider them in a manner similar to that for the existing compulsory licence provisions.
Applications for a licence under the provision would be available from the date of
commencement.
76. The operation of a provision in the Patents Act will not require IP Australia to take
or cease to take any decision and therefore will have minimal impact on the current role
of IP Australia. IP Australia intends to publish the details of the grant, amendment
and/or revocation of a licence, as informed by the Federal Court or the licensee.
77. The Council for TRIPS is required to review annually the functioning of the
TRIPS Protocol system with a view to ensuring its effective operation, and to report on
its operation to the TRIPS General Council.43 In Australia, review of the provision
43
Annex to the TRIPS Agreement, paragraph 7.
39
would be in accordance with the Government`s five-yearly review requirements,44 or if
specific issues were raised through use of the system or by reviews conducted by the
Council for TRIPS. No specific arrangements would be necessary.
44
See the Office of Best Practice Regulation`s Best Practice Regulation Handbook, August 2007, Chapter
2. See .
40
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act
2011
Intellectual Property Laws Amendment Bill 2013
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The Intellectual Property Laws Amendment Bill 2013 makes amendments to several
areas of Australia`s intellectual property legislative framework comprising of the
Patents Act 1990 (the Patents Act), Trade Marks Act 1995 (the Trade Marks Act),
Designs Act 2003 (the Designs Act) and Plant Breeder's Rights Act 1994 (the Plant
Breeder`s Rights Act).
The Bill makes the following amendments:
o Schedule 1 modifies Crown use provisions in the Patents Act to reduce
uncertainty about the circumstances in which Crown use may apply and to
strengthen transparency and accountability in their use;
o Schedules 2 and 3 amend the Patents Act to implement the Protocol amending
the World Trade Organization Agreement on Trade-Related aspects of
Intellectual Property (TRIPS Protocol) to assist with the treatment of serious
health problems in developing countries. The Bill enables Australian generic
medicine producers to manufacture and export patented pharmaceuticals to
countries experiencing health crises, under a compulsory license from the
Federal Court. Australia accepted the TRIPS Protocol in September 2007.
o Schedule 4 amends the Plant Breeder`s Rights Act to provide these rights owners
with a quicker and cheaper alternative to enforcing their rights in the Federal
Court. Schedule 4 of the Bill enables Plant Breeder`s Rights actions to be heard
in the Federal Circuit Court.
o Schedule 5 amends the Patents Act to provide for single application and
examination processes for trans-Tasman patents. A single pathway to patent
protection across countries will remove unnecessary administrative processes
and create a more streamlined process for inventors in Australia and New
Zealand. Schedule 5 will also allow for a single trans-Tasman patent attorney
regime which will include common qualifications for registration as a patent
attorney, a single trans-Tasman IP Attorneys Board and a single trans-Tasman IP
Attorneys Disciplinary Tribunal.
o Schedule 6 makes minor administrative changes to the Patents Act, Trade Marks
Act and Designs Act to repeal unnecessary document retention provisions which
are already adequately governed by the Archives Act 1983; and makes minor
technical amendments to the Patents Act to address oversights in the drafting of
the Intellectual Property Laws Amendment (Raising the Bar) Act 2012.
41
Human rights implications
The Bill does not negatively affect any of the applicable rights or freedoms.
Right to health
Article 12 of the International Covenant on Economic, Social and Cultural Rights
(ICESCR) recognises the right of everyone to enjoy the highest attainable standard of
physical and mental health. The ICESCR provides that as part of achieving the full
realisation of this right, States Parties shall take necessary steps to prevent, treat and
control epidemic, endemic, occupational and other diseases.
Article 24 of the Convention on the Rights of the Child (CRC) highlights the right of a
child to enjoy the highest attainable standard of health. Article 24(4) of the CRC
provides that in achieving this right, countries that are party to the CRC shall undertake
the promotion and encouragement of international co-operation having particular
consideration for the needs of developing countries.
The amendments to the Patents Act under Schedules 2 and 3 to the Bill, enable the
export of generic versions of patented medicines to developing countries that are
experiencing serious public health issues and that have no capacity to manufacture the
medicines or purchase them in the normal manner. The amendments will advance the
human right to health for everyone, including children, in developing countries by
assisting with the treatment of serious health problems such as HIV/AIDS, malaria and
tuberculosis.
While the amendments will enable manufacturers of generic pharmaceuticals to apply to
the Federal Court for a compulsory licence, patent owners of affected pharmaceutical
product will be compensated. In that case the Bill will not impact on the human rights of
patent owners or the human rights outlined in Article 15 of the ICESCR45.
Schedules 1, 4, 5 and 6 do not raise any human rights issues.
Conclusion
The Bill is compatible with human rights because it advances the protection of human
rights.
The Hon Greg Combet AM MP, Minister for Climate Change, Industry and
Innovation
45
www.unhchr.ch/tbs/doc.nsf/898586b1dc7b4043c1256a450044f331/03902145edbbe797c125711500584e
a8/$FILE/G0640060.pdf
42
Preliminary Matters
Notes on clauses
Clause 1: Short title
Upon enactment, the Bill will be known as the Intellectual Property Laws Amendment
Act 2013.
Clause 2: Commencement
A number of provisions in the Bill will commence 6 months after the day the Bill
receives Royal Assent. This will enable the necessary regulation changes and
amendments to the Federal Court Rules to be made before commencement.
Schedule 1 will commence 28 days after the Bill receives Royal Assent. This Schedule
implements the amendments to the Crown use provisions in the Patents Act 1990 (the
Patents Act). These provisions will not require regulations. The short period following
commencement allows for transition or adaptation to the new provisions for any party
seeking authorisation or preparing for exploitation under the existing Crown use
provisions.
Schedule 2 will commence 6 months after the Bill receives the Royal Assent. This
schedule implements the interim waiver of paragraphs 31(f) and (h) of the TRIPS
Agreement agreed to by the General Council of the World Trade Organization (WTO)
on 30 August 2003. This will enable the export of pharmaceuticals under compulsory
licence to countries in need, until the TRIPS Protocol agreed to by the General Council
of the WTO on 6 December 2005 comes into force. The TRIPS Protocol will come into
force when two-thirds of WTO members accept it. The interim waiver will terminate as
soon as the TRIPS Protocol takes effect.
Schedule 3 will amend the Patents Act to correctly refer to the TRIPS Agreement as it
will be when amended by the TRIPS Protocol. It will commence at the later of:
(a) 6 months after the day the Bill receives Royal Assent; and
(b) the day the TRIPS Protocol enters into force.
It is appropriate for Schedule 3 to commence as soon as is convenient after the TRIPS
Protocol commences, to ensure that the Patents Act correctly refers to the provisions of
the TRIPS Agreement as amended by the TRIPS Protocol. It would be undesirable to
delay making these amendments until after the TRIPS Protocol comes into force; in that
time the Patents Act would incorrectly refer to the then-terminated interim waiver.
Schedule 4 extends the jurisdiction of the Federal Circuit Court to plant breeder`s rights
matters, and will commence 6 months after the Bill receives the Royal Assent.
Schedule 5 amends the Designs Act 2003 (the Designs Act), the Patents Act, the Plant
Breeder's Rights Act 1994 (the Plant Breeder`s Rights Act) and the Trade Marks Act
1995 (the Trade Marks Act) to implement single trans-Tasman patent application and
examination processes as well as a bilateral arrangement between the Australian and
New Zealand governments for the trans-Tasman regulation of patent attorneys. This
arrangement will come into effect once both countries are able to give effect to it.
43
Accordingly, sufficient time is required for each country to make the necessary
amendments to its legislation.
To allow for this, Schedule 5 will commence on a single date to be fixed by
Proclamation. The Proclamation may specify a day up to the last day of the period of
24 months beginning on the day that the Bill receives the Royal Assent. If the schedule
does not commence in that period, it will be automatically repealed on the day after the
end of that period (i.e. on the second anniversary of the Bill receiving the Royal Assent).
Schedule 6 makes a number of other amendments:
o Part 1 repeals unnecessary document retention provisions, and is due to
commence the day after the Bill receives the Royal Assent.
o Part 2 makes minor technical amendments to address oversights in the drafting of
the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (the
Raising the Bar Act). Items 7 to 13 and 15 are due to commence 6 months after
the Bill receives the Royal Assent, unless proclaimed into effect earlier.
Items 6 and 14 of Schedule 6 will commence retrospectively on 15 April 2013, in line
with the commencement of item 32 of Schedule 6 to the Raising the Bar Act. These
items correct drafting oversights made in preparing the Raising the Bar Act and seek to
clarify existing law only.
Item 6 is a minor amendment to ensure that the heading of section 24 of the Patents Act
accurately reflects amendments made to section 24 by item 32 of Schedule 6 to the
Raising the Bar Act. This minor amendment will not make a substantive change to
existing law.
Item 14 amends paragraph 119(3)(b) of the Patents Act to correct an inadvertently-
created inconsistency between that paragraph and the related provisions of
paragraph 24(1)(a) of the Patents Act. Item 32 of Schedule 6 to the Raising the Bar Act
amended paragraph 24(1)(a) of the Patents Act by omitting the words 'through the
publication or use of the invention'. However, due to an oversight, the same words
appearing in the related paragraph 119(3)(b) of the Patents Act were not omitted. This
item corrects the oversight, ensuring that the long-standing provisions of section 24 and
section 119 continue to be aligned. It is both unlikely to have a substantive impact on
users, and is consistent with existing policy.
Item 16 provides for the different application of the amendments made by items 6 to 15.
It will commence on the day that the Bill receives the Royal Assent.
Clause 3: Schedules
The Patents Act, Trade Marks Act, Designs Act and the Plant Breeder`s Rights Act are
to be amended as set out in Schedules 1 to 6 of the Bill.
44
Schedule 1--Crown Use
Introduction
This schedule contains a number of changes that improve and clarify the operation of the
Crown use provisions in Patents Act.
Crown use permits governments to exploit a patented invention where it is necessary for
the proper provision of services of the Commonwealth or a State. Crown use provisions
provide a safeguard where the patent system may otherwise hinder government in taking
necessary action to deal with urgent or major issues of concern to the public.
The Crown use provisions in the Patents Act allow the Commonwealth or a State or
Territory, or a person authorised by the Commonwealth or a State or Territory, to use an
invention without infringing a patent (or the rights that a nominated person would have
if a patent is later granted on an application for a patent). However, where the provisions
are invoked, the patent owner is entitled to remuneration for such use. This ensures that
the rights of patent owners are taken into account, as well as the needs of the Australian
public.
The provisions were recently reviewed by the Productivity Commission. The
Commission was concerned that aspects of the process in using these provisions created
uncertainty and that there was also a lack of transparency in the way in which they
operated.
The amendments made by this Schedule provide several modifications.
To reduce uncertainty, the amendments will make it clear that Crown use can be
invoked for the provision of a service that any Australian, State or Territory Government
has the primary responsibility for providing or funding.
At the moment, Crown use can be invoked without any prior notice to the patentee -
although there is provision for subsequent discussion about remuneration. To improve
transparency and accountability, the amendments will provide that governments are
required to first seek a negotiated outcome (such as a licence to use the patent) with the
patent owner. These requirements to first attempt to negotiate with the patent owner do
not apply in an emergency.
Should negotiation be unsuccessful, or if access to a patented invention is required in an
emergency situation, Ministerial authorisation for invoking Crown use can be sought.
Should it be approved, the patent owner must be notified of the reasons for the decision.
The reasons must be given to the patent owner prior to exploitation under the Crown use
provisions, or if an emergency, as soon as practicable.
The amendments will also provide additional guidance for determining the remuneration
payable to the patent owner.
To accommodate the new policy to require prior Ministerial approval to invoke Crown
use, it is also desirable to redraft some existing sections in the part of the Patents Act
(Chapter 17) which deals with Crown use.
45
Part 1--Amendments
Items 1 to 3: Section 3 (list of definitions)
[s 3]
Section 3 provides a list of expressions that are defined in the Patents Act. Item 1 inserts
Crown exploitation`, item 2 inserts relevant Minister`, and item 3 inserts service` into
that list.
These insertions are consequential to amendments made to the operation of the Crown
use provisions in items 4 and 5 (below) and as further discussed in item 21 (below).
Item 4: Crown exploitation of inventions
[s 160A]
This item amends Chapter 17 of the Patents Act to introduce new section 160A. New
section 160A provides that the chapter applies to exploitation by the Crown of
inventions the subject of a patent or patent application, restructures and remakes some
parts of existing section 163, and defines terms used in the chapter.
Currently, section 163 provides that Crown use applies where the invention is exploited
for the services of the Commonwealth or a State. The main change introduced by new
section 160A is to clarify that those services include services that the Australian, State
and/or Territory Governments have the primary responsibility for providing or funding.
The intention is that this primary responsibility test would take account of all providers
of similar services. This is discussed further below.
Subsection 160A (1) provides that the chapter applies to the use of an invention by a
relevant authority or by an authorised person for the services of the Commonwealth or a
State. The term relevant authority is defined in the dictionary in Schedule 1 of the
Patents Act to mean the Commonwealth or a State46. This definition is unchanged and
includes the Territories47. Section 162, which is also unchanged, makes clear that a
reference to the Commonwealth or a State includes an authority of the Commonwealth
or a State.
Currently, section 163 provides that non-government bodies may be authorised by the
Commonwealth or a State to exploit an invention for the services of the Commonwealth
or State. The authorisation must be in writing. New subsections 160A(2) and (3) will
46
relevant authority` under Schedule 1 of the Patents Act 1990 (Cth) is defined as being in relation to the
exploitation of an invention by or for the Commonwealth - the Commonwealth; and in relation to the
exploitation of an invention by or for a State - that State.
47
`Commonwealth' under Schedule 2B of the Acts Interpretation Act 1901 means the Commonwealth of
Australia and, when used in a geographical sense, includes the Territory of Christmas Island and the
Territory of Cocos (Keeling) Islands, but does not include any other external Territory.
`State' under Schedule 1 of the Patents Act 1990 (Cth) in relation to Crown use (Chapter 17) includes the
Australian Capital Territory, the Northern Territory and Norfolk Island.
46
continue to allow governments to authorise non-government bodies to exploit an
invention under the Crown use provisions.
Subparagraph 160A(3)(a) amends the Patent Act to provide that a person must be
authorised to exploit an invention under the Crown use provisions before any act
covered by that authorisation is done. Previously a person could be authorised before or
after the act had been done. This change is consistent with the new requirement
introduced by item 5 for prior approval before Crown use may be invoked.
For the services of the Commonwealth or State
New subsection 160A(4) remakes previous subsection 163(3) and provides that, subject
to section 168, an invention is taken to be exploited for the services of the
Commonwealth or of a State if the exploitation of the invention is necessary for the
proper provision of those services in Australia.
New subsection 160A(5) introduces new definitions into the Act. The subsection defines
relevant Minister which is referred to in several following sections. In the case of
exploitation by or on behalf of the Commonwealth, the relevant Minister is the Minister
responsible for the administration of the Patents Act, as provided for in Section 19A of
the Acts Interpretation Act 1901. In the case of exploitation by or on behalf of a State or
Territory, the relevant Minister is the appropriate State or Territory Attorney-General.
New subsection 160A(5) also includes an important clarification of the meaning of
services of a relevant authority. The amended definition makes it clear that Crown
use can be invoked for the provision of a service that the Australian, State and/or
Territory Governments have the primary responsibility for providing or funding.
New subsection 160A(5) provides that in relation to the exploitation of an invention by
or for the relevant authority, the services` of a relevant authority are to be understood to
include those that are:
- primarily provided by the Commonwealth or a State or States; or
- primarily funded by the Commonwealth or a State or States; or
- primarily provided or funded by the Commonwealth and one or more of
the States.
Previous reviews of the Crown use provisions48 have identified uncertainty about the
extent to which the infringement exemption arising under Crown use would extend to
third-party non-government entities providing public services. The amendments made
by this item addresses this uncertainty by making clear that the term services` in
relation to of the Commonwealth or a State includes services primarily provided or
funded by government. The intention is that this primary responsibility test will take
account of all providers of similar services to those provided or funded by a government,
including non-government providers.
48
Chapter 7: Compulsory Licensing of Patents Productivity Commission Inquiry Report, No. 61, 28
March 2013
47
For example, in a scenario where the patented invention concerns diagnostic genetic
testing, genetic testing undertaken by private providers for private patients would be
included in an assessment of whether governments have primary responsibly for
providing or funding such testing. As governments are responsible for providing or
funding the vast majority of genetic tests in the health care sector, they would have
primary responsibility. As a result, genetic testing would be eligible for Crown use,
including when it is undertaken by private providers for private patients. In this scenario,
private providers could be authorised to exercise Crown use on behalf of a government,
as is presently allowed under existing subsection 163(1) of the Patents Act.
Including a test based on primary responsibility for providing or funding the service is
not intended to limit the scope of for the services of the Commonwealth or a State (or
for the services of a relevant authority as represented in new subsection 160A(5)), or
to remove the existing right of individual government bodies to exploit an invention
under Crown use, regardless of their share of the relevant market
Item 5: Crown exploitation
[s 163 & s 163A]
This item repeals section 163 as a result of the restructuring of the provisions and
introduces new sections 163 and 163A. These two new sections implement additional
requirements that must be satisfied in order for the exploitation by the relevant authority
to be exempt from infringement of a patent for the invention.
Section 163 provides the general rule for non-emergency situations. These amendments
ensure that prior to exploitation of an invention by a relevant authority, governments are
required to attempt to negotiate with the patent owner for an authorisation to use the
invention. Should the negotiation attempt be unsuccessful, the relevant authority will
need to seek approval from the relevant Minister (the Minister responsible for
administering the Patents Act or the State or Territory Attorney-General) to rely on the
Crown use provisions. If that approval is given, a statement of reasons for the approval
is to be provided to the patent owner.
New subsection 163(1) provides that Crown exploitation of an invention is not an
infringement of a patent if several conditions are set out. These conditions are set out in
subsection 163(2).
New section 163A provides an exemption to deal with emergency situations. In
emergency situations, several of the requirements in section 163 do not apply.
In some cases, there may be some practical problems involved in a relevant authority
seeking to satisfy the conditions in new section 163, particularly after a period of
inadvertent exploitation. If a relevant authority were to exploit an invention without
satisfying the conditions set out in new sections 163 or 163A, it would not be able to
rely on Crown use. However, the relevant authority would be able to seek to satisfy
those conditions in relation to any exploitation occurring after the relevant conditions
were satisfied, and so be able to rely on Crown use from that time.
48
Prior Negotiation
The current provisions do not require the Crown to obtain consent from, or inform, the
patent owner of its intention to exploit a patented invention before exploitation has
commenced. Currently, the Crown can voluntarily seek consent before, during or after it
has exploited a patent.
These provisions contrast with the compulsory licensing provisions, which require those
seeking a compulsory licence to have tried for a reasonable period, but without success,
to obtain from the patentee an authorisation to work the invention on reasonable terms
and conditions49.
The requirement to negotiate with the patentee prior to invoking Crown use could result
in a superior outcome for government because the agreement could for example
incorporate other know-how of the patent owner. Instituting a requirement to seek prior
consent in Crown use should help achieve better outcomes for all parties. This would
further ensure more efficient exploitation of the patented invention in addressing the
situation at hand and provide greater transparency on the intentions of the Crown to
exploit the invention.
This item amends the Patents Act to introduce new paragraph 163(2)(a) which requires a
relevant authority to first attempt for a reasonable period to negotiate with the patent
owner for authorisation to exploit the invention on reasonable terms.
This is consistent with subparagraph 133(2)(a)(i) of the Patents Act which sets out a
requirement to attempt to negotiate before a compulsory licence can be sought in similar
terms. Item 19 of Schedule 2 of this Bill also introduces a provision for a person to
attempt to negotiate an outcome before seeking a compulsory licence for the export of a
patented pharmaceutical invention. Paragraph 136D(1)(e) introduced by item 19
provides that 30 days is a reasonable period for trying to obtain authorisation. Unlike
section 136D, new section 163 is a technology neutral provision that allows for Crown
exploitation of any technology that can be patented. In most cases, 30 days will be a
reasonable period to try to obtain authorisation under new paragraph 163(2)(a). However
there may be some cases where a shorter or longer period may be reasonable.
New paragraph 163(2)(a) further provides that the relevant Minister must consider
whether the relevant authority has attempted to negotiate with the applicant and the
nominated person, or the patentee for an authorisation to work the invention.
The introduction of a requirement for prior negotiation does not apply where the
situation requiring the exploitation of the patented invention is for an emergency
situation under section 163A (discussed below).
Ministerial oversight
This item also amends that the Patents Act to insert new paragraph 163(2)(b) which
introduces the condition that Ministerial approval must be obtained before a relevant
authority can rely on the infringement exemption provided by the Crown use provisions.
49
Patents Act 1990 (Cth), s. 133(2)(a)(i)
49
Previous reviews have contended that there was a lack of clarity about which Crown
entities constituted the Crown50. A number of entities could potentially qualify as the
Crown, including: employees; commissions; statutory authorities; statutory corporations;
government business entities; government owned corporations; and private corporations
under contract to the government. Similar concerns of ambiguity relate to whether some
research institutes have sufficient government involvement to be considered the
Crown51. This lack of clarity about which entities constituted the Crown may also lead
to a lack of certainty as to who may authorise exploitation by non-government entities
under the Crown use provisions.
The requirement in new paragraph 163(2)(b) for Ministerial approval will provide
greater certainty for government or semi-government entities and for patent owners that
the Crown use provisions apply to the exploitation of an invention.
New paragraph 163(2)(c) provides that where a Minister has approved an instance of
Crown use, the Minister is required to provide the applicant and the nominated person,
or the patentee at least 14 days before the commencement of exploitation:
i) notice of their approval to the Crown exploitation of the invention under
new paragraph 163(2)(b); and
ii) a statement of reasons as to why the approval was given.
Providing the statement of reasons to the applicant and the nominated person, or the
patentee, prior to the commencement of Crown exploitation will provide greater
transparency to the patent owner about the decision to invoke Crown use.
New subsection 163(3) has been included to assist readers. The subsection informs that
the instrument of approval made by the relevant Minister under paragraph 163(2)(b) is
not a legislative instrument within the meaning of section 5 of the Legislative
Instruments Act 2003.
These new requirements will deliver increased oversight to ensure that Crown use is
invoked appropriately. This may increase administrative burden to government bodies
and departments. However, the increased clarity and transparency regarding Crown use
is likely to enhance the Crown`s ability to meet the needs of the public in the rare
circumstances Crown use is invoked, while providing greater certainty to patent owners
that the Crown use provisions will not be used inappropriately.
This will ultimately lead to a more effective application of Crown use. Ministerial
consideration will ensure that Crown use is only invoked where the benefits outweigh
the costs.
50
ACIP (Advisory Council on Intellectual Property) 2005, Review of Crown Use Provisions for Patents
and Designs, Australian Government, Canberra
51
ALRC (Australian Law Reform Commission) Genes and Ingenuity: Gene Patenting and Human Health,
Report no. 99 (2004)
50
Emergency situation
The amendments made by this item also introduce section 163A which provides for a
modified approval process where the exploitation of the invention by the relevant
authority is required due to an emergency.
New subsection 163A(2) provides the preconditions for relying on the Crown use
safeguard. These are that the Minister considers that the exploitation is necessary
because of an emergency, and that the Minister approves the proposed exploitation
before the exploitation starts. During a period of emergency, and in contrast to the non-
emergency approval process of new section 163, the requirement for prior negotiation
and the requirement to provide the statement of reasons prior to Crown exploitation do
not apply.
An emergency would include an unforeseen occurrence or a sudden and urgent occasion
for action52. It could include a public health crisis such as a plague or epidemic, or a
medical emergency such as a pandemic. It could also include war, national security
situations, perceived threats to law and order, natural disasters and other situations of
urgency. It includes but is not limited to situations where a state of emergency has been
declared by a Government.
Although the requirements to negotiate and to provide the statement of reasons prior to
exploitation do not apply in emergencies, new subsection 163A(3) requires that in all
cases the relevant Minister must as soon as practicable provide the patentee with a
statement of reasons for approving the Crown exploitation.
New subsection 163A(4) has been included to assist readers. The subsection informs
that the instrument of approval made by the relevant Minister under paragraph
163A(2)(b) is not a legislative instrument within the meaning of section 5 of the
Legislative Instruments Act 2003.
Items 6 and 7: Section 164
[s 164]
Item 6 revises the heading for section 164 to more appropriately reflect the role this
section provides in requiring the relevant authority to notify the applicant and nominated
persons, or patentee of approval and proposed exploitation under Crown use.
Item 7 amends section 164 consequential upon item 5 that inserts new sections 163(1)
and 163A(1).
52
The Macquarie Dictionary Online © Macquarie Dictionary Publishers Pty Ltd.
51
Items 8 and 9: Crown exploitation--terms (including remuneration)
[s 165(2)]
Item 8 revises the heading for section 165 to reflect more appropriately the role this
section provides in determining the terms for Crown use.
Item 9 repeals the previous section 165 and inserts a new section 165 which modifies
how remuneration for exploitation of an invention is to be determined.
Unlike compulsory licensing, there is no guidance for remuneration to a patent owner in
the existing provisions53. These provisions do not contain reference to a standard of
remuneration for the patent owner. In other words, the provisions do not contain an
express right to adequate` or reasonable` remuneration considering the economic
value` of use. This places the existing arrangements in contrast to the manner in which
remuneration is determined under compulsory licensing agreements54.
Existing subsection 165(2) provides that, when parties fail to come to an agreement,
either party can apply to a prescribed court for a determination on any terms of the
exploitation, including remuneration. The Productivity Commission referred to previous
reviews of the Crown use provisions55, where it was contended that the lack of guidance
on pricing can leave patentees disadvantaged, and that the lack of an applied standard or
criterion to refer to in negotiations could weaken their bargaining position in seeking to
obtain fair and equitable agreement.
Item 9 addresses these concerns and implements these recommendations to reform the
manner in which remuneration is determined under Crown use to be more closely
aligned with that of the existing compulsory licensing provisions under the Patents
Act56. The effect of these changes would be to impose upon the Crown similar
compensatory requirements as those applying to commercial entities accessing a patent
with a compulsory licence.
New subsection 165(1) will remake existing subsection 165(2), with some editorial
changes to improve readability.
New subsection 165(2) provides that in determining the amount of remuneration, the
prescribed court must determine an amount of remuneration that is just and reasonable
and must take into account the economic value of the exploitation of the invention. This
does not prevent a court from also taking into account other relevant matters. For
example, existing subsection 165(4), which will be unchanged, provides that the court
may take into account any compensation that the patent owner has already received from
the relevant authority. It should also be noted that remuneration is only one of the terms
of the Crown exploitation. A reduced remuneration may be negotiated or ordered
because of other more advantageous terms.
53
Patents Act 1990 (Cth), s. 165(2)
54
Patents Act 1990 (Cth), s. 133(5)
55
Chapter 7: Compulsory Licensing of Patents Productivity Commission Inquiry Report, No. 61, 28
March 2013
56
Patents Act 1990 (Cth), s. 133(5)
52
The proposed amendments to restructure the Crown use remuneration process will
provide more certainty about respective obligations in negotiations, in addition to
addressing concerns of an inherent inequality of bargaining power between the patent
owner and the Crown.
Item 10: Subsection 165(3)
[s 165]
This item is consequential upon item 9, which amends section 165. This item amends
the reference to subsection (2)` of section 165 to instead refer to this section`.
Item 11: Subsection 165A (heading)
[s 165A]
This item revises the heading for section 165A to more appropriately reflect the role this
section provides.
Items 12 to 15: Subsections 165A(1) and 165A(2)
[s. 165A(1) & s. 165A(2)]
Item 12 is consequential upon item 4, which introduces the term Crown exploitation` in
new section 160A.
Items 13 to 15 are consequential upon item 4, which updates reference in new section
160A to use relevant authority` when referring to exploitation of the invention under
Crown use.
Items 16 to 18: Section 166
[s 166]
Item 16 is consequential upon item 4, which updates reference in new section 160A to
use relevant authority` when referring to exploitation of the invention under Crown use.
Item17 provides amendments to section 166 consequential upon item 5 that inserts new
subsections 163(1) and 163A(1).
Item 18 is consequential upon item 4, which introduces a definition of relevant
Minister in new section 160A. The new definition is consistent with the reference in
existing section 166 to the Minister or the Attorney-General of a State. The amendment
at item 18 does not change the meaning or operation of section 166.
53
Item 19: Subsections 167(1) and (2)
[s 167(1) &s 167(2)]
Item 19 provides amendments to section 167(1) and section 167(2) consequential upon
item 5 that inserts new sections 163(1) and 163A(1).
Item 20: Section 169
[s 169]
This item repeals section 169 from the Patents Act. Section 169 allows a patent owner
who considers that the patented invention has been exploited by a government for the
services of the Commonwealth or a State to apply to a prescribed court for a declaration
to that effect. If a court made such a declaration, the requirements for terms for the
exploitation (including remuneration) in section 165 would be enlivened. Existing
section 169 also allows the alleged relevant government authority to make a counter-
claim that the patent is invalid and should be revoked.
Under the new arrangement set out in new sections 163 and 163A, the infringement
exception for government use of a patented invention will be conditional on the relevant
Minister approving the use as Crown exploitation. Where the Minister has given this
approval, a patent owner can apply to a prescribed court to determine the terms for the
Crown exploitation, so section 169 is no longer required. If the Minister has not given
this approval, any use would fall outside of the provisions in Chapter 17 of the Patents
Act.
If prior approval had not been given by the Minister and the patent owner had concerns
that their patented invention was being used, they would instead need to take action
under the infringement provisions in Chapter 11 of the Patents Act. For example, section
120 allows a patent owner to commence infringement proceedings and section 121
allows for a counter-claim for revocation of a patent. The Minister or any person may
also seek to have a patent revoked under section 138.
Item 21: Schedule 1
[Schedule 1]
This item amends Schedule 1 of the Patents Act to insert definitions for Crown
exploitation` (which has the meaning given by new subsection 160A(1)), relevant
Minister` (which has the meaning given by new subsection 160A(5)), services` (which
has the meaning given by new subsection 160A(5)) to account for the amendments made
to the operation of the Crown use provisions in item 4 (above).
54
Part 2--Application and transitional provisions
Item 22: Definition
This item introduces the term amended Act` for use in Part 2 of Schedule 1 for the
application and transitional provisions (items 23 to 26 below).
Item 23: Application of amendments
The principles underpinning the application provisions are that the changes should:
- take effect as soon as possible, to quickly improve the operation and
transparency of the Crown use provisions; and
- not unduly prejudice users of the system, particularly with respect to not
affecting any existing or in-force agreements or licences negotiated by a
relevant authority and an applicant and nominated person, or patentee.
The amendments made by Part 1 of Schedule 1 relate to the restructure and modification
of the requirements that must be met prior to an act of exploitation being considered
authorised under Crown use.
These changes are to apply in relation to Crown exploitation which starts, or is proposed
to start, on or after the commencement of Schedule 1.
This means that the changes will apply to acts that would qualify as use under Crown
exploitation where the act considered to be an exploitation of the invention occurs on or
after the day of commencement of Schedule 1.
Item 24: Transitional--authorised person
This item relates to authorisation of a person by a relevant authority for the purposes of
exploitation of an invention under Crown use. Previously a person could be authorised
before or after the act had been done. The amendments at item 4 provide that a person
must be authorised to exploit an invention under the Crown use provisions before any
act covered by that authorisation is done.
The transitional provision is consequential upon the changes that repeal existing section
163 and remake it as new section 160A. The provision ensures that a person authorised
under existing section 163 has the same force as it had before the changes were made,
and as an authorisation provided under the amended provisions will have.
Item 25: Transitional--negotiations
This item relates to the new pre-condition introduced at item 5 that prior to Crown
exploitation under new subsection 163(2), the relevant authority is required to attempt to
negotiate for a reasonable period and under reasonable terms with the patent owner for
55
authorisation to use the invention. If negotiation is unsuccessful, the relevant authority
can to seek approval from the relevant Minister to invoke Crown use under new
paragraph 163(2)(b).
The requirement for prior negotiation in paragraph 163(2)(a) is a new pre-condition that
did not exist under the previous Crown use provisions. Nevertheless, a government
agency may have entered into negotiations to gain the patent owner`s permission to use
a patented invention.
The transitional provision ensures that, if a relevant authority has engaged in negotiation
with the patent owner for authorisation to work an invention prior to commencement of
this Schedule, the relevant authority is not required to repeat the negotiation process
upon commencement of this Schedule.
Item 26: Transitional--agreements and determinations
This item relates to an agreement or determination of the terms for exploitation of the
invention between the relevant authority and the patent owner for the purposes of
exploitation of an invention under Crown use.
The transitional provision is consequential upon the changes that repeal existing
subsection 165(2) and remake it as new subsection 165(1). The provision ensures that an
agreement or determination under existing subsection 165(2) has the same force as it
had before the changes were made, and as an agreement or determination made under
the amended provisions will have.
56
Schedule 2--TRIPS Protocol interim waiver
Introduction
Many least-developed and developing countries do not have the capacity to manufacture
the medicines necessary to treat epidemics such as malaria, HIV/AIDS and tuberculosis.
The interim waiver and the TRIPS Protocol agreed to by the General Council of the
WTO provide a mechanism to provide such countries with the medicines they need to
address health problems.
This schedule contains amendments to enable countries to source generic versions of
patented pharmaceuticals from Australia in accordance with the WTO General Council`s
2003 interim waiver and Australia`s other international obligations. The approach aims
to balance the interests of patent owners, importing countries and manufacturers of
generic medicines. Schedule 3 contains amendments to implement the TRIPS
Agreement as amended by the TRIPS Protocol, when it comes into effect.
An outline of the proposed process for obtaining and exercising a compulsory licence
under the interim waiver / TRIPS Protocol is as follows:
1. Identify a country`s need for a pharmaceutical product and establish that
the country has insufficient manufacturing capacity
A country identifies that it has a public health problem that can be addressed by
the use of a particular pharmaceutical product. The country also establishes that
it has insufficient or no manufacturing capacity to make the necessary product
(this is not required for a least-developed country).
2. Identify a suitable Australian manufacturer to make the product and
identify the relevant patent(s)
The importing country finds an Australian pharmaceutical manufacturer with the
technical capacity to make the product--whether from basic chemicals or from
active ingredients sourced outside Australia. The importing country and the
Australian pharmaceutical manufacturer then identify any relevant patents in
Australia.
3. Attempt to obtain authorisation
The Australian pharmaceutical manufacturer makes reasonable attempts to
obtain authorisation from the innovator company (the patentee) to manufacture
and export the product(s). This step may be omitted if the public health problem
amounts to a national emergency or other circumstance of extreme urgency, in
the importing country.
4. Notify intent to use the system
If the Australian pharmaceutical manufacturer is unsuccessful in obtaining the
innovator company`s authorisation within 30 days of seeking it, or circumstances
of national emergency or extreme urgency apply in the importing country, the
importing country notifies its intent to use the Protocol system and other details.
Importing countries that are WTO members must notify the Council for Trade-
57
Related Aspects of Intellectual Property Rights (TRIPS Council); those that are
not WTO members must notify the Commissioner of Patents.
5. Apply to the Federal Court for a compulsory licence
The Australian pharmaceutical manufacturer applies to the Federal Court for a
compulsory licence to use the patent(s). The Court hears the application, using an
expedited process in urgent cases.
6. Notify grant of the compulsory licence
If the Federal Court grants the licence, the licensee must notify the
Commissioner of Patents of the licence and of the address of the website where
shipment information is to be posted (see no. 9 below). The Commissioner then
provides this information to the TRIPS Council.
7. Determine remuneration
If the Federal Court grants the compulsory licence, the Australian
pharmaceutical manufacturer and the patentee can negotiate the remuneration
due to the patentee for the use authorised by the licence. If they cannot agree, the
Federal Court can determine the remuneration. This can occur when the court
considers the application for the licence, or on a separate application later on.
If the pharmaceutical product is to address a public health crisis in the importing
country, then the Australian manufacturer can make and export the
pharmaceutical product before the remuneration is determined. For other public
non-commercial use of the pharmaceutical product by the importing country, the
remuneration must be determined before the Australian manufacturer can make
and export the pharmaceutical product.
8. Manufacture and export of the patented pharmaceutical
The Australian pharmaceutical manufacturer makes and exports the patented
pharmaceutical in accordance with the terms of the licence.
9. Notify details of shipment
Before sending the pharmaceutical to the importing country, the Australian
pharmaceutical manufacturer posts the quantities, destinations, labelling and
markings of the product(s) on the website referred to at no.6.
10. Take reasonable measures to prevent re-exportation
The importing country and anyone importing the pharmaceutical product on its
behalf must take reasonable measures to prevent re-exportation of the
pharmaceutical product. This is to ensure that the pharmaceutical product is used
in the importing country for the intended public health purposes. The measures
taken by the importing country must be proportionate to the country`s
administrative capacity and to the risk of the pharmaceutical product being
diverted.
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Items 1 to 11: List of definitions
[s 3]
Item 1 removes the expression compulsory licence` from the list of expressions defined
in Schedule 1 to the Patents Act. That definition relates to general compulsory licences
only and so is no longer suitable.
Items 2 to 11 insert into the list of defined expressions the following expressions:
o eligible importing country, to refer to those countries eligible to import
pharmaceutical products under the system (see the notes on item 26 below)
o patented pharmaceutical invention, to refer to those inventions that are subject
to the new compulsory licence provisions (see the notes on item 27 below)
o pharmaceutical product, to refer to those products that may be manufactured
and exported under the new provisions (see the notes on item 28 below)
o PPI, to provide an abbreviation for patented pharmaceutical invention (see the
notes on items 29 to 34 below)
o PPI ancillary licence, to provide an abbreviation for the ancillary licence
provided for in paragraph 136F(3)(a)(i) (see the notes on items 29 to 34 below)
o PPI compulsory licence, to provide an abbreviation for the compulsory licence
provided for in section 136C (see the notes on items 29 to 34 below)
o PPI cross-licence, to provide an abbreviation for the cross-licence provided for
in paragraph 136F(3)(a)(ii) (see the notes on items 29 to 34 below)
o PPI order, to provide an abbreviation for the court order provided for in section
136C to grant a PPI compulsory licence (see the notes on items 29 to 34 below)
o PPI order applicant, to provide an abbreviation for the person applying under
section 136C for an order to grant a compulsory licence (see the notes on items
29 to 34 below)
o WTO General Council decision of 30 August 2003, to refer to the interim
waiver of paragraphs 31(f) and (h) of the TRIPS Agreement (see the notes on
item 35 below).
Items 12, 13 and 14: Extensions of patent term
[s 70, s 71]
These items amend the Patents Act to ensure that obtaining regulatory approval for the
export of pharmaceuticals to countries in need does not adversely affect a patent owner`s
subsequent application for an extension of the term of a patent.
Section 70 enables the term of a patent for a pharmaceutical invention to be extended to
compensate patent owners for delays in obtaining marketing approval from the
59
Therapeutic Goods Administration (TGA). An extension of term of up to five years is
available if certain conditions are satisfied.
These conditions include that goods containing the pharmaceutical substance are
included in the Australian Register of Therapeutic Goods (ARTG) and at least five years
has passed from the filing date of the patent to the first regulatory approval date. The
first regulatory approval date is either:
o the date of commencement of the first inclusion in the ARTG of goods that
contain the substance; or
o where pre-TGA marketing approval was given - the date of the first approval to
market or import the substance or product containing it into Australia.
Under sections 71 and 77, the first regulatory approval date is also used to calculate the
period within which an application for an extension of term must be made, and the
actual extension period.
In some cases, pharmaceuticals to be exported in accordance with the objectives of the
TRIPS Protocol may be exempt under section 18 of the Therapeutic Goods Act 1989
from being included in the ARTG. However, ARTG listing of pharmaceuticals may still
be sought.
It would not be appropriate for such an inclusion in the ARTG to adversely affect the
patent owner`s subsequent application for an extension of term. This is because the
patent owner would be expected to obtain only limited remuneration for the export of
the product to an eligible importing country. This should be the case whether the first
inclusion is sought by the patent owner, by a manufacturer of generic medicines under a
voluntary licence from the patent owner, or by a manufacturer of generic medicines
under a TRIPS Protocol licence granted under the new provisions.
These items address this problem by providing that, when working out a pharmaceutical
substance`s first regulatory approval date, an inclusion in the ARTG is to be disregarded
if it was sought for the sole purpose of exporting goods containing the pharmaceutical
substance from Australia to be used in an eligible importing country in circumstances
governed by the TRIPS Protocol. These circumstances are further discussed below in
regards to item 19 and section 136D. This approach will ensure that a patent owner`s
application for an extension of term is not adversely affected by the export of
pharmaceuticals to countries in need.
Items 15 to 18: Compulsory licences (general)
[s 133, s 134]
Items 15 to 17 place the existing provisions for compulsory licences in sections 133 and
134 in a new Part 1 of Chapter 12 to govern compulsory licences generally. This
structure will clearly differentiate the existing compulsory licence provisions from the
new provisions relating to the TRIPS Protocol.
Item 18 amends subsection 134(1) to make it clear that the provisions in section 134 for
revocation of compulsory licences only apply to the general type of compulsory
60
licences. Separate provision is to be made for the revocation of compulsory licences
governed by the new provisions.
Item 19: Compulsory licences (patented pharmaceutical inventions)
This item amends Chapter 12 to provide in a new Part 2 the provisions for the
application, grant, amendment, remuneration and revocation of licences relating to the
TRIPS Protocol and associated ancillary licences and cross-licences. It also establishes a
new Part 3 for the existing provisions relating to the revocation of patents generally.
Division 1--Scope of Part 2
Relationship between Parts 1 and 2
[s 136B]
This division and section explains that the new provisions relating to TRIPS Protocol
licences for pharmaceutical inventions do not prevent a compulsory licence for a
patented pharmaceutical invention being granted under the general compulsory licence
provisions in Part 1.
Division 2--Patented pharmaceutical invention compulsory licences (grant)
Application for order to grant PPI compulsory licence
[s 136C(1)]
This subsection provides that a person may apply to the Federal Court for a PPI
compulsory licence to work a patented pharmaceutical invention to the extent necessary
for the purposes of manufacturing a pharmaceutical product in Australia for export to an
eligible importing country. The term work` is defined in Schedule 1 to the Patents Act
as including importation of the patented product and to the extent necessary` is in line
with wording of the TRIPS Protocol. The Federal Court is best placed to determine if a
compulsory licence should be granted and is able to deal with applications quickly in
urgent situations.
There may be situations where a person may need a PPI compulsory licence for more
than one pharmaceutical invention. In the interests of efficiency, it is intended that a
person may apply for an order requiring a patent owner to grant a single PPI compulsory
licence in respect of more than one pharmaceutical invention.
The TRIPS Protocol enables the export of products only to certain countries in order to
avoid misuse of the system. Paragraph 1(b) of the Annex to the TRIPS Agreement
defines those countries that are eligible importing Members` of the WTO. Subsection
136C(1) implements a modified version of this requirement by providing that the
purpose of the licence must be to export to an eligible importing country. Item 26
amends Schedule 1 to define an eligible importing country and explanation of the
definition is provided in relation to that item.
61
As clarified by Note 1 to the subsection, and the definition to be inserted by item 27, a
patented pharmaceutical invention may be a patented product or a patented process. A
PPI compulsory licence may be granted to work a patented process for manufacturing a
pharmaceutical product so that it can be exported to an eligible importing country.
[s 136C(2)]
This subsection provides that a person cannot apply for an order in respect of an
innovation patent unless the patent has been certified. This is because an innovation
patent cannot be enforced until it has been examined and certified, and is also for
consistency with subsection 133(1A) governing applications for general compulsory
licences.
[s 136C(3)]
This subsection provides that an application for a PPI compulsory licence must include a
statement to the effect that the eligible importing country will take reasonable measures
to prevent re-exportation from its territory of a pharmaceutical product that is imported
into its territory in accordance with a PPI compulsory licence.
The exportation of pharmaceuticals to least-developed and developing countries carries
a risk of the pharmaceuticals being diverted from the intended recipients and being sold
for profit in other countries. The requirement to provide a statement will help to reduce
this risk, and is consistent with paragraph 3 of the Annex to the TRIPS Agreement.
[s 136C(4)]
This subsection provides that if the pharmaceutical product is to be imported on behalf
of, and with the authorisation of, the importing country, an application must also include
a statement made by the importer. The statement must be that the importer will take
reasonable measures within its means to prevent the pharmaceutical product from being
used other than in accordance with a PPI compulsory licence. This provision will help to
prevent the pharmaceutical product from being diverted from the intended recipients in
the importing country.
[s 136C(5)]
This subsection sets out the parties to proceedings on an application for a PPI
compulsory licence. The eligible importing country has the option of being a party to
such proceedings.
Order for PPI compulsory licence
[s 136D(1)]
This subsection provides that the Federal Court may make an order requiring the
patentee to grant a PPI compulsory licence to the applicant, if the court is satisfied of a
number of matters. These matters ensure that a licence is only granted in appropriate
circumstances and consistently with Australia`s international obligations.
62
Paragraph (a) - application made in good faith
It is possible that a person may inappropriately seek a PPI compulsory licence for a
purpose other than to export a pharmaceutical product to a country in need. For example,
the applicant may actually wish to prepare stocks of the product for commercial sale
immediately upon the expiration of the patent. This requirement enables the court to
determine whether the licence is being sought for its intended purpose. In accordance
with the WTO General Council chairperson`s statement of 6 December 2005 on the
TRIPS Protocol, the system of PPI compulsory licenses is intended to be used in good
faith to protect public health, and not as an instrument for pursuing industrial or
commercial objectives.
Paragraph (b) - importation by or on behalf of the eligible importing country
As noted above in relation to subsection 136C(1), the TRIPS Protocol limits export to
certain countries. Paragraph 136D(1)(b) implements this requirement, with some
modifications. Item 26 amends Schedule 1 to the Patents Act to define the expression
eligible importing country`, and explanation of the definition is provided in relation to
that item. Also, in some circumstances it may be appropriate for the product to be
imported by another country, regional group or non-government organisation on behalf
of the eligible importing country. This may enable the product to be obtained or
distributed more efficiently, and paragraph 136D(1)(b) enables this to occur. Importation
on behalf of eligible importing countries is not provided for in the TRIPS Protocol.
However, it provides such countries with some flexibility in obtaining the medicines
they need.
Paragraph (c) - proposed use of pharmaceutical product
The TRIPS Protocol is intended to help address the public health problems afflicting
many least-developed and developing countries. The requirement in this paragraph is to
ensure that the proposed use of the pharmaceutical product is consistent with that intent,
and with paragraph 1(a) of the Annex to the TRIPS Agreement.
Article 17.9.7(b) of the Australia-United States Free Trade Agreement provides that
Australia shall not permit the use of the subject matter of a patent without the
authorisation of the right holder except in cases of public non-commercial use, or of
national emergency, or other circumstances of extreme urgency, provided that a number
of conditions apply. The requirement in paragraph 136D(1)(c) is intended to ensure that
a PPI compulsory licence would only be granted in one of those circumstances in the
importing country. In circumstances of national emergency or extreme urgency in the
importing country, it is expected that the applicant could provide evidence of this to the
satisfaction of the court. Examples of public non-commercial use include use by a
government or a non-profit non-government organisation.
Paragraph (d) - necessity of licence
It is possible that a licence could be sought to work an invention that is not necessary to
enable the pharmaceutical product to be provided to the eligible importing country to
address the public health problem. The requirement in this paragraph is to ensure that
there is a direct link between the licence to work the invention (i.e. by manufacturing
and exporting the patented pharmaceutical product) and the required purpose.
63
Paragraph (e) - authorisation by patentee
In circumstances of extreme urgency in an eligible importing country, including a
national emergency, it is not reasonable to require the applicant to seek authorisation
from the patentee before applying for a PPI compulsory licence. This could create delay
with serious consequences for the people suffering the health problem.
However, if there are no circumstances of extreme urgency in the eligible importing
country, it is appropriate that the applicant seek such authorisation, as voluntary licences
between parties are preferable to compulsory licences ordered by the courts.
This is consistent with Article 31(b) of the TRIPS Agreement. The period of 30 days for
trying to obtain authorisation is intended to provide certainty for all parties, and to
reduce the scope for any party to deliberately delay an application for a PPI compulsory
licence.
Paragraph (f) - notification requirements
Paragraph 2(a) of the Annex to the TRIPS Agreement provides that the eligible
importing WTO Member must notify the Council for TRIPS of a number of matters.
These comprise:
the names and expected quantities of the product(s) needed;
confirmation that the Member (if not a least-developed country) has insufficient
manufacturing capacities for the product(s) in question;
confirmation that, where a pharmaceutical product is patented in its territory, the
Member has granted or intends to grant a compulsory licence to allow importing
and use of the product.
This notification requirement is to help ensure that Protocol licences are granted in
appropriate circumstances. Regulations made for the purposes of paragraph 136D(1)(f)
would prescribe these requirements.
The definition of eligible importing country` to be inserted by item 26 will include
some countries that are not WTO Members. It is intended that the regulations would
require non-WTO Members to notify the prescribed information to the Commissioner of
Patents, not to the Council for TRIPS. Publication on the WTO or IP Australia websites
of the prescribed information is to be accepted as evidence that the notification
requirement has been complied with.
Paragraph (g) - measures against diversion
As noted above, there is a risk of the exported pharmaceuticals being diverted from the
intended recipients. This requirement is to help ensure that this does not occur. The
statements provided under subsection 136C(3) and 136C(4) (if applicable) are to
constitute evidence for the court`s consideration of this matter.
[s 136D(2)]
This subsection provides that the Court must take into account any matters prescribed in
the regulations when deciding whether it is satisfied of a matter mentioned in subsection
136D(1). For example, the regulations may provide that, when determining whether the
64
application has been made in good faith, the court must consider evidence of the
previous activities of the applicant and the eligible importing country.
Terms of PPI compulsory licence
[s 136E(1)]
This subsection specifies the terms of any PPI compulsory licence that may be granted.
Paragraphs (a) and (b) - quantity of product manufactured and exported
In order to help ensure that the PPI licence is being used for its intended purpose, it is
important that only the amount of pharmaceutical product necessary to meet the needs of
the eligible importing country is manufactured, and that all of the product is exported to
that country, whether directly or by way of another country. These terms are in
accordance with paragraph 2(b)(i) of the Annex to the TRIPS Agreement. Should it
become apparent that additional quantities are needed, an amendment to the licence can
be sought under section 136G.
Paragraph (c) - labelling and marking
As mentioned above, there is a risk of the exported pharmaceuticals being diverted from
the intended recipients. It is therefore appropriate that the pharmaceutical product be
labelled and marked so that it is easily identified as being for the intended purpose, and
not for sale in other markets.
The regulations will prescribe the labelling and marking requirements in accordance
with paragraph 2(b)(ii) of the Annex to the TRIPS Agreement. This requires that
products manufactured under licence be clearly identified through specific labelling or
marking. It also states that suppliers should distinguish such products through special
packaging and/or special colouring/shaping of the products themselves, provided that
such distinction is feasible and does not have a significant impact on price. The
Attachment to the WTO General Council chairperson`s statement of 6 December 2005
also discussed best practices for differentiating products.
Should it become apparent that some change is needed to the labelling and marking of a
pharmaceutical product, an amendment to the licence can be sought under section 136G.
Paragraph (d) - publishing shipment information
In the interests of transparency, it is appropriate that information on the quantities being
supplied to each destination and the distinguishing features of the products be made
available on a website. The regulations will set out these requirements in accordance
with paragraph 2(b)(iii) of the Annex to the TRIPS Agreement.
Paragraph (e) - duration
In order to help ensure that the PPI licence is being used for its intended purpose, it is
appropriate that the duration of the licence be limited to that which is necessary to
address the public health problem concerned. This provision implements this approach
in accordance with Article 31(c) of the TRIPS Agreement. Should it become apparent
65
that a change to the duration is necessary, an amendment to the licence can be sought
under section 136G.
Paragraph (f) - no exclusive right
As the purpose of a PPI compulsory licence is to enable countries in need to access vital
pharmaceuticals, it would not be appropriate for a PPI compulsory licence to give the
licensee the exclusive right to work the patented pharmaceutical invention. The granting
of other licences to enable the export of a pharmaceutical product to the same or other
countries in need should be allowed, if not encouraged. This provision implements this
approach and is consistent with paragraph 133(3)(a) of the Patents Act in regards to
general compulsory licences.
Paragraph (g) - restricting assignment of licence
In order to help ensure that the PPI compulsory licence is used for its intended purpose,
it is appropriate that the licence is to be assignable only in connection with an enterprise
or goodwill in connection with which the licence is used. This provision is consistent
with paragraph 133(3)(b) of the Patents Act in regards to general compulsory licences.
Paragraph (h) - giving information to the Commissioner
In the interests of transparency, it is appropriate that the Commissioner is provided with
details about the licence granted, any subsequent amendment of the licence and the
address of the website referred to in (d) above. This will enable the Commissioner to
publish the information on the IP Australia website and to inform the Council for TRIPS
as required by paragraph 2(c) of the Annex to the TRIPS Agreement.
[s 136E(2)]
This subsection provides the Court with the power to order that the licence include any
other terms, including terms covering the labelling and marking of the product and the
information provided by the licensee. It is difficult to foresee all the relevant issues that
may need to be taken into account when determining the terms of a PPI compulsory
licence in a given situation. For example, due to the circumstances in a particular
eligible importing country, it may be necessary to further reduce the risk of the product
being diverted to other markets. This could involve additional identification
requirements for the pharmaceutical product, or the licensee providing information on
how the product will be shipped and supplied to the intended recipients. This provision
provides the Court with the flexibility to specify such terms where necessary and is
consistent with subsection 133(3) of the Patents Act in regards to general compulsory
licences.
[s 136E(3)]
This subsection provides that a term specified in the Court order must not be
inconsistent with any regulations prescribed for the purposes of labelling and marking of
the pharmaceutical product, providing information on a website prior to shipment or
providing information to the Commissioner.
66
Order for ancillary compulsory licence and cross-licence
[s 136F]
In some cases, the applicant for a PPI compulsory licence may be unable to work the
patented pharmaceutical invention without infringing another patent for a related
invention. Section 136F governs what the court may do in such cases.
Restriction on making PPI order
The court may make the order for a PPI compulsory licence only if it is satisfied that the
patented pharmaceutical invention involves an important technical advance of
considerable economic significance on the other invention. This ensures that a licence is
being sought for the appropriate patent and is in accordance with Article 31(l)(i) of the
TRIPS Agreement and subsection 133(3B) of the Patents Act relating to general
compulsory licences.
PPI ancillary licence
If the Court makes the order for a PPI compulsory licence, the court must also order that
the patentee of the other invention must grant to the PPI order applicant a PPI ancillary
licence to work the other invention. This enables the PPI order applicant to obtain
permission to work all the related patents necessary for manufacturing and exporting the
pharmaceutical product.
Should the patentees of the patented pharmaceutical invention and the other invention be
the same person, it might be expected that the applicant would apply directly under
136C for a PPI compulsory licence from the patentee for both patents.
The PPI order applicant can only assign any PPI ancillary licence with the PPI
compulsory licence. This is to ensure that the PPI ancillary licence continues to be used
for the purpose it was granted, and is in accordance with Article 31(l)(iii) of the TRIPS
Agreement.
PPI cross-licence
If the patentee of the other invention so requires, the court must also order the patentee
of the patented pharmaceutical invention to grant the patentee of the other invention a
PPI cross-licence to work the patented pharmaceutical invention. This is to enable the
patentee of the other invention to be compensated for the grant of the PPI ancillary
licence, should it wish to be, and is in accordance with Article 31(l)(ii) of the TRIPS
Agreement.
Parties to proceedings
The patentee of the other invention and any person claiming an interest in the other
invention are also parties to any proceedings under section 136C regarding an
application for a PPI compulsory licence.
67
Division 3--Patented pharmaceutical invention compulsory licences (amendment)
Amendment of a PPI compulsory licence
[s 136G]
Any person may apply to the Federal Court for an order to amend any of a number of
terms of a PPI compulsory licence. It may be difficult for the eligible importing country
and the PPI compulsory licence applicant to predict the quantity of the pharmaceutical
product and the duration of the licence required to address the health problem. Similarly,
owing to changed circumstances, it may be appropriate to change the labelling and
marking of the product, and the information to be provided by the licensee. This
provision enables any person to seek an amendment to the PPI compulsory licence to
account for such developments, and thereby potentially avoid the delay and expense of
making a new application for a PPI compulsory licence. Enabling amendment of the PPI
compulsory licence is not required by the TRIPS Protocol, but will provide a balanced
and efficient means of dealing with changed circumstances.
The court may grant the order to amend the licence if it is satisfied that it is just to do so
and the legitimate interests of the listed persons are not likely to be adversely affected by
the amendment. This approach ensures that the Court considers all the relevant effects of
the proposed amendment before making a decision. The applicant for amendment only
has legitimate interests to be considered if the applicant is one of the listed persons.
An amended term must not be inconsistent with any regulations prescribed for the
purposes of labelling and marking of the pharmaceutical product, providing information
on a website prior to shipment or providing information to the Commissioner.
Subsection 136G(4) sets out the parties to any proceedings for amendment of a PPI
compulsory licence. The eligible importing country has the option of being a party at
will.
Amendment of a PPI ancillary licence
[s 136H]
This section permits a PPI ancillary licence to be amended where appropriate. For
example, if the duration of the PPI compulsory licence is amended, the duration of the
ancillary licence may need to be amended correspondingly. Any person may apply to the
Federal Court for such an amendment.
The court may grant the order if it is satisfied of all of the following:
o the PPI ancillary licence as amended would allow the patented pharmaceutical
invention to be worked under the terms of the PPI compulsory licence
o it is just to do so in all the circumstances
o the legitimate interests of the listed persons are not likely to be adversely
affected by the amendment.
68
As with amendment of PPI compulsory licences, this approach is to ensure that the court
considers all the relevant effects of the proposed amendment before making a decision.
The applicant for amendment only has legitimate interests to be considered if the
applicant is one of those listed persons.
Subsection 136H(4) sets out the parties to any proceedings for amendment of an
ancillary licence. The eligible importing country has the option of being a party at will.
Enabling amendment of an ancillary licence is not required under the TRIPS Protocol,
but this will provide a balanced and efficient means of dealing with changed
circumstances.
PPI cross-licence - amendment
[s 136J]
In some circumstances it may be appropriate to amend a PPI cross-licence. For example,
the court might extend the duration of the PPI ancillary licence, and the PPI cross-
licence might not fairly compensate the patentee of the other invention for the extended
PPI ancillary licence. Any person may apply to the Federal Court for such an
amendment.
The court may grant the order if it is satisfied that it is just to do so and the legitimate
interests of the persons listed at subsection 136J(3)(b) are not likely to be adversely
affected by the amendment. The applicant for amendment only has legitimate interests
to be considered if the applicant is one of those listed persons.
Subsection 136J(4) sets out the parties to any proceedings for amendment of a PPI cross-
licence.
Enabling amendment of a cross-licence is not required under the TRIPS Protocol, but
this provides a balanced and efficient means of dealing with changed circumstances.
Proceedings for PPI licence amendments may be heard together
[s 136K]
This section explains that the Federal Court may deal with applications for amendments
of terms of PPI compulsory licences, PPI ancillary licences and PPI cross-licences
together as it may be more efficient for the Court to do so.
Division 4--Patented pharmaceutical invention compulsory licences (revocation)
Revocation of PPI compulsory licences or PPI ancillary licences
[s 136L]
This section provides that any person may apply to the Federal Court to revoke a PPI
compulsory licence or a PPI ancillary licence. Only the court can revoke these licences,
thereby ensuring that the legitimate interests of the licensee and the eligible importing
69
country are considered. The court may revoke the licence if it is satisfied of a number of
matters. These matters ensure compliance with Article 31(g) of the TRIPS Agreement
and that PPI compulsory and ancillary licences may be revoked if they are no longer
appropriate.
The court must first be satisfied of one or all of the following grounds when considering
an application for revocation.
Ground 1 - Change in circumstances justifying the licence
The first ground of revocation is that the substantive circumstances that justified the
grant of the licence have ceased to exist and are unlikely to recur. For example, if the
health problem in the eligible importing country has abated and the pharmaceutical
product is no longer required for the foreseeable future, then it is appropriate that the
licence may be revoked.
Only the substantive circumstances justifying the grant of the licence are relevant to this
consideration. For example, this ground should not be made out merely because the
applicant for the PPI compulsory licence had not complied with all of the notification
requirements specified in the regulations for paragraph 136D(1)(f).
Ground 2 - Non-compliance with terms of licence
An alternative ground is that the licensee has not complied with the terms of the licence.
This is to help ensure that a licensee abides by the terms of the licence. This ground
should not be made out for minor or trivial breaches that do not affect anyone`s interests,
but should be found for serious breaches with harmful consequences.
For example, this ground should be made out if the PPI compulsory licensee does not
comply with the terms relating to marking and labelling of the product, thereby
increasing the risk of the product being diverted to other markets. In contrast, this
ground should not be made out if the PPI compulsory licensee inadvertently
overproduces the patented pharmaceutical product and the excess is disposed of with the
consent of the patentee.
Ground 3 - Failure to pay remuneration within the time agreed or determined
Another ground for revocation is that the amount negotiated under section 136P has not
been paid to the patent owner within the time agreed or determined. This ground is to
ensure that the patent owner is compensated for the licence within the agreed time
period.
The legitimate interests of the licensee or the eligible importing country
If any of the grounds for revocation is made out, the court may only revoke the licence if
satisfied that that the legitimate interests of the licensee or the eligible importing country
are not likely to be adversely affected by the revocation.
For example, the eligible importing country might not have appropriately authorised the
pharmaceutical product to be imported on its behalf. Nevertheless, the country might
wish to import the product to address the health problem. In such a case, it would not be
appropriate for the PPI compulsory licence to be revoked.
70
The applicant for revocation has no legitimate interest to be considered if the applicant is
not the licensee or the eligible importing country.
Subsection 136L(3) sets out the parties to any proceedings under this section. The
eligible importing country has the option of being a party at will.
Enabling revocation of a PPI compulsory licence is not required under the TRIPS
Protocol, however this provision will provide a balanced and efficient means of dealing
with changed circumstances.
PPI cross-licence
[s 136M]
This section provides that any person may apply to the Federal Court to revoke a PPI
cross-licence. The court may revoke the licence if it is satisfied that it is just to do so in
all the circumstances and the legitimate interests of the listed parties are not likely to be
adversely affected by the revocation.
For example, if the PPI ancillary licence is revoked, the patentee of the other invention
may no longer need compensation in the form of the PPI cross-licence. In this case it
may be appropriate for the cross-licence to also be revoked. Subsection 136M(3) sets out
the parties to any proceedings under this section.
Proceedings for PPI licence revocation may be heard together
[s 136N]
This section explains that the Federal Court may deal with applications for revocation of
PPI compulsory, ancillary and cross-licences together. This is to allow the court to avoid
multiple proceedings for revocation of those licences.
Division 5--Patented pharmaceutical invention compulsory licences
(remuneration)
Remuneration for PPI compulsory licence
[s 136P]
This section provides for the patentee to be remunerated for the use of the patented
pharmaceutical invention authorised by the PPI compulsory licence and specifies how
the remuneration amount is to be determined. These provisions are to ensure that
appropriate remuneration is paid to the patentee in a manner consistent with the
requirements of the TRIPS Protocol.
Subsection 136P(2) defines that use to be either the use authorised by the licence as
granted and amended, or where the licence is no longer in force, the actual use of the
invention while the licence was in force. This approach ensures that the remuneration to
the patentee is not finally determined at the time the licence is granted, but can be
adjusted to take into account any changed circumstances.
71
Subsection 136P(3) defines the remuneration amount to be either an amount agreed
between parties or an amount determined by the Federal Court to be adequate
remuneration, taking into account the economic value to the eligible importing country
of the use authorised.57
Subsection 136P(4) provides that any person may apply to the Court to make or amend
such a determination. This approach provides the parties with an opportunity to reach
agreement but, where this does not occur, enables the Court to determine remuneration
according to Article 31bis(2) of the Annex to the Protocol Amending the TRIPS
Agreement. In most circumstances it would be appropriate for the Court to determine the
matter if agreement is not reached within 30 days of the PPI compulsory licence being
granted or amended. Subsection 136P(5) sets out the parties to any proceedings under
this section.
Subsection 136P(6) explains that a PPI compulsory licensee may only begin exploiting a
PPI compulsory licence, whether or not remuneration is yet to be agreed or determined,
if the proposed use of the product is to address circumstances of national emergency or
extreme urgency in the importing country. In such cases it would be inappropriate to
delay provision of the product until remuneration had been determined, particularly as
there may be a significant period of negotiation between the patentee and the licensee.
This provision ensures that the licensee can commence the manufacture and export of
the product as soon as the licence is granted, but that the patentee will receive
appropriate remuneration.
Subsection 136P(7) provides that a PPI licensee must not exploit a PPI compulsory
licence, other than to address circumstances of national emergency or extreme urgency,
unless an amount has been agreed or determined. This is to avoid the licensee exploiting
the patent and creating unreasonable delays in the determination of remuneration.
Subsection 136P(8) explains that a PPI compulsory licence may be revoked regardless
of whether an amount has been agreed or determined.
Division 6--Patented pharmaceutical invention compulsory licences (general)
Nature of order
[s 136Q]
This section provides that a court order to grant or amend a licence under Part 2 is
equivalent to a deed executed by the patentee and all other necessary parties. This
provision is consistent with subsection 133(4) in regards to general compulsory licences.
57
The Productivity Commission recently completed a review of compulsory licensing under the Patents
Act 1990. This review specifically included investigating the question of adequate` remuneration.
72
Orders to be consistent with international agreements
[s 136R]
This section ensures that an order made under Part 2 is not inconsistent with a treaty
between the Commonwealth and a foreign country, including the Australia-United
States Free Trade Agreement. This provision is consistent with section 136 in regards to
general compulsory licences.
Item 20: Revocation of patents (general)
[s 137]
This item clarifies that the Commissioner must not accept an offer to surrender a patent
where a general compulsory licence is in force in relation to the patent. The
Commissioner can, however, accept an offer to surrender a patent where a licence
granted in relation to a patented pharmaceutical invention is in force in relation to the
patent. Sections 137 and 138 are provided in a new Part 3 relating to the revocation of
compulsory licences in general.
Item 21: New Heading for Part
This item provides a new heading for the existing provisions on parties to proceedings
(section 139) and the giving of copies of orders to the Commissioner (section 140).
Items 22 and 23: Parties to proceedings
[s 139]
Item 22 inserts a note after subsection 139(1) to direct the reader to Part 2 for details of
parties to proceedings relating to compulsory licences for patented pharmaceutical
inventions.
Item 23 amends subsection 139(2) to provide that the applicant to any proceeding under
Part 2 must serve a copy of the application on the Commissioner and that the
Commissioner may appear and be heard in the proceedings.
Item 24: Regulation-making power
[s 228]
This item amends subsection 228(1) to ensure that there is sufficient power to make the
regulations necessary for carrying out or giving effect to the WTO General Council
decision of 30 August 2003. Item 35 amends Schedule 1 to the Patents Act to define the
expression WTO General Council decision of 30 August 2003`, and the definition is
explained below.
These regulations would govern a number of matters, including the information the
Commissioner must give to the TRIPS Council so that Australia complies with its
obligations as an exporting country under paragraph 2(c) of the Annex to the TRIPS
Agreement.
73
Item 25: Definition of compulsory licence
[Schedule 1]
This item repeals the definition of compulsory licence, as it could not apply
appropriately to compulsory licences under the TRIPS Protocol.
Item 26: Definition of eligible importing country
[Schedule 1]
This item inserts a definition of the expression eligible importing country`, used in the
new Part 2 in Chapter 12. As outlined above in relation to subsection 136C(1),
paragraph 1(b) of the Annex to the TRIPS Agreement limits eligible importing members
to least-developed country WTO Members and other WTO Members that have made a
notification to the Council for TRIPS of their intention to use the TRIPS Protocol system
as an importer. This does not enable export to non-WTO Member countries and so limits
the potential benefits of the TRIPS Protocol system.
Item 26 defines an eligible importing country as one of three types:
o A foreign country recognised by the United Nations as a least-developed
country. Not requiring the country to be a WTO Member increases the number of
countries that are eligible to use the system. The United Nations maintains a list
of least-developed countries which is available through its web portal.
o A foreign country that has notified the Council for TRIPS of its intention to use
the 2003 interim waiver as an importer.
o A foreign country included in a prescribed class of countries. It is intended that
the regulations will prescribe one class of foreign countries--countries that are
not WTO Members, but which have notified the Commissioner of Patents of
their intention to use the system set out in Chapter 12, Part 2 of the Patents Act.
Other classes of eligible importing countries may be prescribed if it becomes
apparent that the existing classes are insufficient.
Item 27: Definition of patented pharmaceutical invention
[Schedule 1]
This item inserts a definition of patented pharmaceutical invention`. Under the new Part
2 of Chapter 12, a PPI compulsory licence may be obtained in relation to a patented
pharmaceutical invention. The definition provides that a patented pharmaceutical
invention can be a patented pharmaceutical product, or it can be a patented process for
producing the pharmaceutical product. This enables a PPI compulsory licence to be
obtained for the type of invention required to manufacture and export a pharmaceutical
product and is consistent with Article 31bis(1) of the Annex to the Protocol Amending
the TRIPS Agreement.
74
Item 28: Definition of pharmaceutical product
[Schedule 1]
This item inserts a definition of pharmaceutical product. Under new Part 2 in Chapter
12, a PPI compulsory licence may be obtained for the purposes of manufacturing and
exporting a pharmaceutical product. The definition provides that a pharmaceutical
product is any patented product, or product manufactured through a patented process, of
the pharmaceutical sector. The definition and examples given are consistent with
paragraph 1(a) of the Annex to the TRIPS Agreement and include a broad range of
products including vaccines, provided that they fall within the pharmaceutical sector.
Items 29 to 34: PPI definitions
[Schedule 1]
Item 29 inserts a definition of PPI as being an abbreviation for patented pharmaceutical
invention. Items 30 to 34 inserts definitions of various terms used in new Part 2 of
Chapter 12, by reference to the sections where they are first used. These terms are to
differentiate between general compulsory licences and the various licences relating to
patented pharmaceutical inventions under the TRIPS Protocol system.
Item 35: Definition of WTO General Council decision of 30 August
2003
[Schedule 1]
This item inserts a definition of the expression WTO General Council decision of 30
August 2003`. The 2003 decision implemented the interim waiver of Article 31(f) and
(h) of the TRIPS Agreement to enable WTO Members to manufacture and export
pharmaceutical products under compulsory licence. Schedule 2 of the Bill implements
the 2003 interim waiver. As noted above, should the TRIPS Protocol come into force,
item 5 of Schedule 3 would repeal this definition and insert a definition of TRIPS
Agreement as amended by the TRIPS Protocol.
Part 2--Application
Item 36: Application of amendments
Sub-item (1) provides that PPI compulsory licences and other licences may be granted
under the new Part 2 of Chapter 12 in respect of existing patents and patents for which
the application was filed before commencement of this Schedule. This is to allow the
new provisions to be used immediately upon their commencement, rather than only in
relation to later granted patents for pharmaceutical inventions. This is consistent with the
intention of providing a mechanism to provide least-developed and developing countries
with the medicines they need to address health problems.
Sub-item (2) provides that the amendments relating to the disregarding of an inclusion in
the Australian Register of Therapeutic Goods only apply to applications for inclusion
made on or after the commencement of this Schedule. Inclusions resulting from
75
applications made before commencement cannot be disregarded for the purposes of
working out the date of first inclusion. This is to prevent patentees from enjoying a
windfall from applications for inclusions that were not made in reliance on the new
compulsory licensing provisions.
76
Schedule 3--TRIPS Protocol: later commencing
amendments
Introduction
This schedule contains amendments to implement the TRIPS Agreement as amended by
the TRIPS Protocol, when it comes into effect. Schedule 2 contains amendments to
enable countries to source generic versions of patented pharmaceuticals from Australia
in accordance with the WTO General Council`s 2003 interim waiver and Australia`s
other international obligations.
Items 1 and 2: Definitions
[s 3]
Item 1 inserts the expression TRIPS Agreement` into the list of expressions defined in
the dictionary in Schedule 1 to the Patents Act. Item 2 removes the expression WTO
General Council decision of 30 August 2003` from the list of defined terms. These
amendments are consequential on the TRIPS Protocol coming into effect and
superseding the 2003 General Council decision.
Item 3: Amendment of reference to 2003 General Council decision
[s 228]
This item amends subsection 228 (1)(f) so that the reference to the 2003 General
Council decision is replaced by reference to the TRIPS Agreement. This will ensure that
there is sufficient power to make the regulations necessary for carrying out, or giving
effect to the TRIPS Agreement as amended by the TRIPS Protocol, if the TRIPS
Protocol should come into effect.
Item 4: Definition of eligible importing country
[Schedule 1]
This item amends the definition of eligible importing country so that category (b) of
that definition refers to a foreign country that has notified the Council for TRIPS of its
intention to use as an importer the system as set out in the new provisions inserted into
the TRIPS Agreement by the TRIPS Protocol, instead of that system as set out in the
2003 General Council decision.
Items 5 and 6: Definition of TRIPS Agreement
[Schedule 1]
These items insert a definition of TRIPS Agreement and repeal the definition of
WTO General Council decision of 30 August 2003`. These amendments are
consequential on the TRIPS Protocol coming into effect and superseding the 2003
General Council decision.
77
78
Schedule 4--Plant Breeder's Rights Act 1994: Federal
Circuit Court
Introduction
This schedule is to make the amendments necessary to provide the owners of plant
breeder`s rights (PBR) in a plant variety with the option of taking action in the Federal
Circuit Court against alleged infringers. The amendments address the need for a way to
resolve disputes about the infringement of PBR in a plant variety that is quicker and less
formal than taking action in the Federal Court. As most disputes over plant breeder`s
rights are less complex matters, and many of the parties involved are small businesses
with limited resources, the Federal Circuit Court is well placed to hear such cases.
Items 1, 2 and 3: Definitions
[s 3]
These items:
o repeal the definition of the expression Court, as the definition refers to the
Federal Court only and so is no longer suitable (item 1)
o define the expression Federal Circuit Court as meaning the Federal Circuit
Court of Australia (item 2)
o define the expression Federal Court as meaning the Federal Court of Australia
(item 3).
Item 4: Subsection 39(5)
A decision of the Administrative Appeals Tribunal (AAT) can be appealed to the
Federal Court. Under subsection 44A(2) of the Administrative Appeals Tribunal Act
1975 (AAT Act), the Federal Court has the power to stay or otherwise affect the
operation or implementation of the decision of the AAT or of the agency. The Federal
Court can transfer an appeal to it to the Federal Circuit Court. In such cases the Federal
Circuit Court can also make orders under subsection 44A(2) of the AAT Act. This item
is a consequential amendment clarifying that these powers remain unaffected by section
39 of the PBR Act.
Item 5: Subsection 50(7)
This item is similar to item 4, in that it clarifies that section 50 of the PBR Act does not
affect the powers of the Federal Court or of the Federal Circuit Court under section
44A(2) of the AAT Act.
79
Items 6 and 7: Actions for infringement
[s 54]
These items substitute references to Court` with references to the Federal Court or the
Federal Circuit Court` or court`. These substitutions are to permit actions for
infringement of PBR to be taken in the Federal Court or in the Federal Circuit Court.
Currently, actions for infringement can be taken in the Federal Court only.
Items 8 and 9: Declarations of non-infringement
[s 55]
Items 6 and 7 substitute references to Court` with references to the Federal Court or
the Federal Circuit Court` or court`. These substitutions are to permit persons proposing
to do an act relating to PBR protected material to apply to the Federal Court or to the
Federal Circuit Court for a declaration that the act does not infringe the PBR. Currently,
such an application can be made to the Federal Court only.
Items 10 to 16: Jurisdiction of the Federal Court
[s 56]
These items amend section 56 - currently providing for the jurisdiction of the Federal
Court - as a consequence of the extension of jurisdiction to the Federal Circuit Court.
Item 17: Correcting a typographical error
[s 56]
This item corrects a typographical error.
Item 18: New section 56A Jurisdiction of Federal Circuit Court
This item inserts a new section 56A providing for the jurisdiction of the Federal Circuit
Court. Section 56A is modelled on section 56, which currently provides for the
jurisdiction of the Federal Court under the Plant Breeder`s Rights Act.
As with the Federal Court, the Federal Circuit Court is to have the jurisdiction conferred
under Part 5 of the Plant Breeder`s Rights Act - namely, in proceedings for infringement
of PBR, or applications for declarations of non-infringement. See the notes above.
By analogy with the jurisdiction of the Federal Court, this jurisdiction is exclusive of the
jurisdiction of all other courts - excepting the jurisdiction of the Federal Court under
section 56, and the original jurisdiction of the High Court under the Commonwealth
Constitution.
By analogy with the powers of the Federal Court in proceedings for infringement of
PBR, the Federal Circuit Court is to be able to grant injunctions and either award
damages or order an account of profits.
80
As with the Federal Court, the regulations are to be able to govern the practice and
procedure of the Federal Circuit Court in actions under the Plant Breeder`s Rights Act.
Nevertheless, this conferral of regulation-making power is not to limit the power of the
Federal Circuit Court to make its own Rules of Court for such actions, provided these
Rules are consistent with any regulations made under the power.
Items 19 and 20: Innocent infringement
[s 57]
These items substitute references to the Court` with references to a court` and the
court`. As the Federal Court is able to do now, the Federal Circuit Court is to be able to
refuse to award damages, or order an account of profits, against an infringer if satisfied
that the infringer was not aware of, and had no reasonable grounds to suspect the
existence of PBR in a plant variety.
Item 21: Agents may act in matters relating to PBR
[s 72]
This item is to ensure that a general provision allowing one person to act for another
under the Plant Breeder`s Rights Act is clearly subject to the Rules of the Federal Circuit
Court for any transactions before that court. The item is also to ensure that more
standard reference is made to the Rules of Court of the High Court and to the Rules of
Court of the Federal Court.
81
Schedule 5--Australia New Zealand Single Economic
Market
Introduction
Single patent application and examination processes
Patents for inventions are territorial rights granted by sovereign states. Most patent
applications filed in New Zealand are also filed in Australia. These applications are
currently subject to a similar, but separate, examination process. Providing for single
application and examination processes will reduce duplication, leading to increased
efficiencies and potential cost savings for inventors and users of the patent system.
The process involves:
o either country accepting the filing of applications, correspondence and other
documents and accepting the payment of fees, resulting in the filing of
documents under each country`s law
o an examiner in either country considering applications for grant of patents under
both countries` laws--as a delegate of each country`s Commissioner of Patents.
This new process will not create a single patent covering both Australia and New
Zealand. Each country will grant patents under its own legislation.
A single Trans-Tasman patent attorney regime
The Patents Act creates and regulates a class of professionals called patent attorneys.
Patent attorneys provide a valuable service to innovators and business by advising them
how to protect their intellectual property. Patent attorneys must satisfy specific
requirements, relating to their technical qualifications and character in order to be
registered.
The Trans-Tasman Mutual Recognition Arrangement (TTMRA`), signed in 1996,
streamlines the reciprocal registration of members of occupations, including patent
attorneys. The majority of Australian and New Zealand patent attorneys are already
registered in both countries under the TTMRA, paying fees in both countries annually
for the renewal of their registrations.
The TTMRA does not, however, require that an Australian or New Zealand patent
attorney demonstrate their competence in the law and practice of the other country to
obtain registration there under the TTMRA. Nor is it currently a requirement for
domestic registration in Australia or in New Zealand that a person demonstrate such
competence in both countries` law and practice, so that a person could successfully
practise in both countries.
Australia and New Zealand have agreed to establish a single trans-Tasman regulatory
regime for patent attorneys, under a bilateral arrangement. The arrangement was signed
in March 2013 by the relevant Australian and New Zealand Ministers and is publicly
available on the IP Australia website58.
58
http://www.ipaustralia.gov.au/pdfs/13-04-02_Bilateral_Arrangement_Final_Version.pdf
82
The regime will achieve efficiencies in the regulation of patent attorneys through:
o a single trans-Tasman register of individual and incorporated patent attorneys
o common requirements for registration, appropriate to whether the person is an
individual or a company
o a trans-Tasman code of conduct for patent attorneys
o a common disciplinary process
o common regulatory bodies--the Designated Manager, the Trans-Tasman IP
Attorneys Board and the Trans-Tasman IP Attorneys Disciplinary Tribunal.
Australia will amend its patents legislation to provide for the trans-Tasman regulatory
regime. This Schedule makes the necessary amendments to the Patents Act to implement
the regime.
The Schedule also makes consequential amendments to the Trade Marks Act to allow
the Trans-Tasman IP Attorneys Board to regulate Australian registered trade marks
attorneys, continuing the current role of the Professional Standards Board for Patent and
Trade Marks Attorneys. New Zealand does not currently have a trade mark attorney
profession, but a number of patent attorneys practise as trade mark specialists.
The Schedule also amends the Australian patents, trade marks, designs and plant
breeder`s rights legislation to allow applicants for these IP rights to provide a single
address for service in either Australia or New Zealand. This will mean that applicants
for IP rights in both these countries will not need to nominate an address for service in
each country. The Schedule will also provide the flexibility to allow service
electronically in future.
Part 2 of the Schedule contains several transitional arrangements to ensure a smooth
transition to the new regime. In overview:
o At commencement, all patent attorneys registered in New Zealand but not in
Australia will be entered into the Australian Register of Patent Attorneys. This
will then be the single trans-Tasman register of patent attorneys.
o New Zealand patent attorneys who are trade mark specialists will be able to
apply in a 12-month transitional period to be registered as Australian trade marks
attorneys, without obtaining further qualifications, so long as the Designated
Manager is satisfied the patent attorney has a sufficient level of competency in
trade marks law and practice.
o A person who passes one of the New Zealand patent attorney examinations
before commencement can complete the rest of those examinations in a four-year
transitional period, and seek registration as a patent attorney under the new
regime within six months of passing the examinations, without obtaining further
qualifications.
o An attorney who is the subject of disciplinary proceedings in New Zealand at
commencement can be subsequently removed from the trans-Tasman register, if
a New Zealand court finds that the person should not practise as a patent attorney
in New Zealand.
83
Once the Bill is enacted, IP Australia intends to seek the necessary amendments to the
regulations. The commencement of the amending regulations would be conditional on
the commencement of this Schedule (see notes on Clause 2 above).
It is expected that New Zealand will make complementary legislation to recognise the
Australian regulatory regime, including the status of a New Zealand company registered
as a patent attorney in Australia. Only an individual or company registered as a patent
attorney in Australia would be permitted to practice as a patent attorney in New Zealand.
Expressions used frequently in these notes:
o The Australian Commissioner of Patents is the official principally responsible
for the administration of the Patents Act 1990.
o The Designated Manager is an SES employee (currently the Director-General
of IP Australia) charged with administering the system of registration and
deregistration of patent attorneys.59
o The Director-General of IP Australia is the Chief Executive of IP Australia for
the purposes of the Financial Management and Accountability Act 1997
o An incorporated patent attorney is a company registered as a patent attorney
under new subsections 198(9) to (11) of the Patents Act, which came into effect
on 15 April 2013.60
o IP Australia is a prescribed Agency for the purposes of the Financial
Management and Accountability Act 1997. The Patent Office, Trade Marks
Office, Designs Office and the Plant Breeder`s Rights (PBR) Office operate
within it.
o The New Zealand Commissioner of Patents is the official principally
responsible for the administration of the Patents Act 1953 (NZ). See also the
definition inserted by item 54 in Part 1 of this Schedule.
o A New Zealand delegate is a New Zealand patents official (see below) to whom
the Australian Commissioner delegates powers and functions under the Patents
Act. See the definition inserted by item 55 in Part 1 of this Schedule.
o A New Zealand patents official is a person employed in any part of the State
services of New Zealand whose functions or duties relate to administering New
Zealand patents law. See the definition inserted by item 57 in Part 1 of this
Schedule.
o The Professional Standards Board for Patent and Trade Marks Attorneys is the
body established by section 227A of the Patents Act. It has a central role in the
accreditation of persons for registration as attorneys, and in the discipline of
registered attorneys.
59
See s 200A and, generally, Chapter 20, Patents Act
60
Inserted by item 21 of Schedule 4 to the Intellectual Property Laws Amendment (Raising the Bar) Act
2012 (Raising the Bar Act`)
84
Part 1--Amendments
Designs Act 2003
Items 1 to 4: Service of documents in Australia or New Zealand
[s 145]
These items broaden the allowable addresses for service of documents under the Designs
Act, and provide flexibility in specifying the means of service.
Currently, an address for service under the Designs Act must be a physical or postal
address in Australia, and the permitted means of service are by postal or personal
delivery to that address (see also section 28A of the Acts Interpretation Act 1901).
Item 2 amends the Designs Act to allow an address in New Zealand to be an address for
service of documents. As a result any person seeking design protection in Australia will
be able to nominate an address in either Australia or New Zealand as their address for
receiving notices from the Registrar of Designs.
Item 3 amends the Designs Act to allow a document to be served to an address for
service in Australia or New Zealand by means prescribed in the regulations. Initially, the
prescribed means would be those currently available, that is, by post.
In future, IP Australia proposes to develop electronic means for routinely and securely
serving notices on electronic addresses in Australia or New Zealand. When appropriate
means are available, these may be prescribed in the regulations.
There might be some uncertainty about whether an electronic address can be an address
for service in Australia or in New Zealand. To put this beyond doubt, item 4 inserts new
subsections 145(2) to (5) to allow an electronic address to be an address for service in
Australia or in New Zealand. This will apply from a time specified in regulations, but
not before those regulations are registered in the Register of Legislative Instruments
under the Legislative Instruments Act 2003. The question of whether a particular
electronic address is in Australia or in New Zealand is to be determined in accordance
with the regulations.
These amendments do not affect the rules of courts or tribunals governing service. The
courts and tribunals decide what constitutes effective service in proceedings before
them, including service on persons outside Australia.
Neither Australia nor New Zealand registers specialist design protection professionals.
In Australia, patent attorneys, trade marks attorneys or legal practitioners advise
businesses on how to protect their designs. In New Zealand, registered patent attorneys
or lawyers provide this advice.
85
Patents Act 1990
Items 5 to 13: Definitions
[s 3]
These items amend the list of defined terms to reflect the inclusion, amendment or
repeal of definitions by items 49 to 59. These definitions allow the amended provisions
of the Patents Act to be more concise.
Items 14 and 15: Protection of New Zealand delegates
[s 20]
These items amend the Patents Act to ensure that New Zealand delegates of the
Australian Commissioner (see item 25) enjoy the same immunity from liability under
section 20 as Australian officers and employees in the Patent Office. This immunity is
limited to the exercise of powers or performance of functions delegated to the New
Zealand delegate under the Australian patents legislation. It does not apply to their
exercise of powers or performance of functions under the New Zealand patents
legislation: when performing their duties as examiners of New Zealand patent
applications. See item 55 for the definition of New Zealand delegate`.
Generally, Australian legislation is presumed to only apply in Australia.
Paragraph 21(1)(b) of the Acts Interpretation Act 1901 provides that references in any
Act to localities and jurisdictions are to be read as references to those in and of the
Commonwealth of Australia. Currently, section 12 extends the Patents Act and its
regulations to Australia`s continental shelf and its external territories, but not to any
foreign nation.
Several of the amendments made by this Schedule insert provisions stating that, for the
purpose of specified provisions, it is immaterial whether some act takes place in New
Zealand, or whether some matter concerns something taking place in New Zealand. This
ensures that the Australian legislation can apply to specified actions or circumstances
taking place in New Zealand as necessary.61
Item 15 inserts new subsection 20(3) stating that it is immaterial for the purposes of
section 20 whether the act was done in New Zealand. That is, the immunity from
liability will be available for an act, even if it is done in New Zealand. For example, say
a New Zealand delegate of the Australian Commissioner does not accept an application
for grant of a patent when examining it, owing to a mistaken understanding of the
invention being claimed. Later on, a Deputy Commissioner in Australia hears the
applicant and accepts the application. The applicant is inconvenienced by the delay in
the grant of the patent. It is immaterial that the New Zealand delegate`s decision is made
in New Zealand: the New Zealand delegate will have the same immunity in Australia as
an Australian delegate.
61
See items 16, 21, 23, 34, 35, 38, 45, 48 and 85
86
Item 16: Disclosure of information to New Zealand Registrar of
Companies and to New Zealand delegates of the Commissioner
[s 183]
This item amends the Patents Act to permit the disclosure of information to the New
Zealand Registrar of Companies (Registrar of Companies`) and to New Zealand
delegates of the Australian Commissioner in New Zealand.
New subsections 183(3) and (4) make it clear that the Designated Manager can give
information, including personal information, to the Registrar of Companies, where the
Designated Manager obtains that information as a result of performing functions and
duties, or exercising powers, in relation to incorporated patent attorneys. The substituted
definition of company` (see item 50)--which includes a company registered under the
Companies Act 1993 (NZ)--ensures that those powers and functions can apply to those
New Zealand companies seeking registration or that are registered in Australia as
incorporated patent attorneys.62
In the course of administering the patent attorney regime, the Designated Manager may
obtain information relating to an incorporated patent attorney that would be relevant to
the Registrar of Companies` functions under the Companies Act 1993 (NZ). For
instance, the Designated Manager might obtain information indicating that the company
is trading in New Zealand while insolvent. It is in the public interest that the Designated
Manager be able to disclose such information to the Registrar of Companies. The new
subsection is directly modelled on new subsection 183(2), which makes it clear that the
Designated Manager can give information to the Australian Securities and Investments
Commission ASIC.63
New subsections 183(5) and (6) make it clear that the Australian Commissioner can give
information, including personal information, to a New Zealand delegate to assist the
delegate in exercising their delegated powers and functions. This power is necessary to
ensure that a New Zealand delegate has access to the same information that the
Australian delegate would have when examining an Australian application. Item 25
inserts a new provision permitting the Australian Commissioner to delegate powers and
functions to New Zealand patents officials.
Item 17: Repeal of an outdated offence provision
[s 185]
This item repeals an offence provision that is no longer required in the Patents Act. The
provision imposes a penalty of 10 penalty units (currently $1,700) on officers and
employees of the Patent Office who prepare documents relating to other persons`
inventions or who search the records of the Patent Office unofficially. The provision for
a special offence, applying only to officers and employees of the Patent Office, appears
outdated. Such conduct would breach the APS Code of Conduct in the Public Service
Act 1999, and could be dealt with appropriately under that Act.
62
Under new subsections 198(9) to (11) inserted by item 21 of Schedule 4 to the Raising the Bar Act
(with effect from 15 April 2013)
63
Inserted by item 15 of Schedule 4 to the Raising the Bar Act (with effect from 15 April 2013)
87
Item 18: Repeal of residency requirement
[s 198]
This item repeals the requirement that an individual be ordinarily resident in Australia to
be registered as a patent attorney. This requirement is inconsistent with the single trans-
Tasman attorneys` regime.
An individual seeking registration as a patent attorney must:
o hold qualifications specified in, or ascertained in accordance with, the
regulations
o have been employed as prescribed for not less than the prescribed period
o be of good fame, integrity and character
o not have been convicted of a prescribed offence during the previous five years
o not be under sentence of imprisonment for a prescribed offence
o meet any other requirements prescribed by the regulations.64
The Patents Regulations will continue to specify stringent requirements for the
qualifications and employment of individuals seeking registration.65 These appear
sufficient to ensure the technical competence and good character of individuals
registered as patent attorneys in Australia and New Zealand. No residency requirement
will be prescribed in the regulations.
Item 19: Reference to the Professional Standards Board
[s 198]
This item amends section 198 to replace an occurrence of Professional Standards
Board` with the more concise Board`. This is consequential on the amendment made by
item 40, which continues the Professional Standards Board for Patent and Trade Marks
Attorneys under its new title: the Trans-Tasman IP Attorneys Board`.
Items 20 and 21: Registration of patent attorneys
[s 198]
These items amend section 198 of the Patents Act to ensure that its provisions for
registering individuals and companies66 as patent attorneys can apply appropriately to
the circumstances in New Zealand of an individual or company.
Item 20 repeals current subsection 198(7) of the Patents Act which provides how to
work out if an individual is ordinarily resident in Australia. This provision is no longer
required, as a consequence of the removal of the residency requirement (see item 18).
Item 20 also repeals existing subsection 198(8) and substitutes a new subsection 198(7)
for it. Substitute 198(7) ensures that someone found guilty, but not convicted of an
64
Inserted by item 17 of Schedule 4 to the Raising the Bar Act with effect from 15 April 2013
65
See Part 2 of Chapter 20 of the Patents Regulations 1991
66
See new subsections 198(9) to (11) inserted by item 21 of Schedule 4 to the Raising the Bar Act
88
offence in New Zealand is treated the same as someone found guilty, but not convicted
of an offence in Australia.
Currently, a person who is the subject of an order under section 19B of the Crimes Act
1914--or its State or Territory equivalents--is taken to have been convicted of that
offence for the purposes of section 198. Section 19B of the Crimes Act permits a court
to find that a charge is proved, but to dismiss the charge or to discharge the person
without conviction (e.g. on an order to be of good behaviour for some period).
An example of how the deeming provision in substituted subsection 198(7) works
follows:
1. Existing paragraph 198(4)(e) of the Patents Act disqualifies someone from
registration as a patent attorney if convicted of a prescribed offence during the
previous five years.
2. The regulations made for the purpose of that paragraph currently prescribe
offences against the Australian intellectual property legislation, including the
Patents Act 1990.67
3. Those regulations would be amended to prescribe offences against the
New Zealand intellectual property legislation, including the Patents Act 1953
(NZ). See notes on item 21 below.
4. An individual is found guilty in New Zealand of an offence against section 103
of the Patents Act 1953 (NZ)--for acting as a patent attorney in New Zealand
without being registered there.
5. The New Zealand court discharges the individual without conviction under the
New Zealand equivalent of section 19B of the Crimes Act.68
6. Owing to substituted subsection 198(7), that individual is taken to have been
convicted of the offence for the purposes of paragraph 198(4)(e) of the Patents
Act.
7. The individual is barred from registration as a patent attorney for five years from
the date of being discharged by the New Zealand court.
Item 21 inserts new subsection 198(12) ensuring that the matters required for an
individual or a company to register as a patent attorney can relate to Australia or to New
Zealand as required69:
o The requirements for an individual to register as a patent attorney in paragraphs
198(4)(a) to (g) (see the list in item 18 above)--e.g. an individual is disqualified
from being registered if convicted of a prescribed offence in Australia or New
Zealand in the previous five years.
o The employment requirement prescribed under paragraph 198(4)(c) will specify
that the relevant employment has been undertaken in Australia or New Zealand.
67
Subregulation 20.12(2) of the Patents Regulations (at 1 October 2012).
68
Sections 106 and 107 of the Sentencing Act 2002 (NZ) appear to correspond to section 19B of the
Crimes Act 1914 (at 18 September 2012)
69
The new subsection follows new subsections 198(9) to (11) inserted by item 21 of Schedule 4 to the
Raising the Bar Act (with effect from 15 April 2013)
89
o A qualification for registration can consist of examinations conducted by the
Trans-Tasman IP Attorneys Board in Australia or New Zealand. This is in the
unlikely event that the Board ever conducts examinations again. For some while
individuals have qualified for registration by undertaking appropriate tertiary
studies approved by the Board.
o A company incorporated in New Zealand seeking registration as a patent
attorney in Australia (New Zealand company`) must have at least one director
who is
-- a registered patent attorney in Australia. See item 82 which ensures that all
New Zealand patent attorneys become Australian patent attorneys at
commencement
-- a validly appointed director of the company under New Zealand company
law.
o The New Zealand company must notify the Designated Manager of its intention
to act as a patent attorney. It will not matter that it intends to practise in
Australia, in New Zealand or in both countries.
o The New Zealand company must comply with any additional requirements
prescribed in the regulations, whether these requirements concern something that
happened in Australia or New Zealand. For example, the regulations would
require that the company provide evidence that it has adequate and appropriate
professional indemnity insurance for its practice as an incorporated patent
attorney--whether this is in Australia, in New Zealand or in both countries.
Items 22 and 23: Deregistration of patent attorneys
[s 199]
These items amend section 199 of the Patents Act to make it plain that the prescribed
grounds for deregistration of a patent attorney can concern something that happened in
New Zealand. The Designated Manager can deregister persons (both individuals and
companies) registered as patent attorneys.70 The substituted definition of company` (see
item 50)--which includes a company registered under the Companies Act 1993 (NZ)--
ensures that New Zealand companies can be registered in Australia as incorporated
patent attorneys.
The grounds and manner of deregistration of individuals are prescribed in the
regulations.71 For example, an individual may be deregistered for failing to meet the
continuing professional education (CPE) requirement.72 As a result of new subsection
199(2), it is immaterial that a person who fails to meet the CPE requirement resided in
Australia or in New Zealand in the year. It is expected that sufficient CPE activities
would be available in both countries.
Similarly, for any prescribed ground of deregistration of a company as an incorporated
attorney (e.g. failing to maintain adequate and appropriate indemnity insurance would be
70
From 15 April 2013, companies will be able to be registered as patent attorneys under new ss198(9) to
(11) inserted by item 21 in Schedule 4 to the Raising the Bar Act
71
For individuals, Part 6 of Chapter 20 of the Patents Regulations (at 1 October 2012)
72
Regulations 20.24 and 20.28 of the Patents Regulations (at 1 October 2012)
90
prescribed), it would be immaterial whether the company is established in Australia or
New Zealand.
Items 24 to 26: Delegation to New Zealand patents officials
[s 209]
These items amend the Patents Act to permit the Australian Commissioner to delegate
all or any of the Australian Commissioner`s powers and functions under the Patents Act
and its regulations to a New Zealand patents official (see item 57).
This will allow the Australian Commissioner to delegate powers and functions to patent
examiners in the Intellectual Property Office of New Zealand. Similarly, it is proposed
that the New Zealand Commissioner would delegate powers and functions under New
Zealand`s patents legislation to patent examiners in the Patent Office in Australia
(Patent Office`). A delegate of both the Australian and New Zealand Commissioners
will be able to examine applications made in Australia and in New Zealand for the grant
of patents in both countries.
The Australian and New Zealand Governments will enter into a bilateral instrument
setting out the powers and functions each country`s Commissioner will delegate to
patents officials in the other country. This instrument will provide evidence of each
country`s consent to its patents officials exercising powers and functions delegated by
the other country`s Commissioner. It will be made publicly available once it is finalised.
New subsection 209(1B) puts it beyond doubt that the New Zealand delegate of the
Australian Commissioner can exercise delegated powers or perform delegated functions
in New Zealand. This ensures the legal effect in Australia of actions taken by a New
Zealand delegate. See the notes for items 14 and 15 above.
As with Australian delegates, a New Zealand delegate must--if so required by the
instrument of delegation--exercise a delegated power or perform a delegated function
under the direction or supervision of the Commissioner or an employee in the Patent
Office specified in the instrument of delegation (see subsection 209(2) of the Patents
Act). This will ensure that New Zealand delegates can be given appropriate guidance by
Australian patents officials.
Items 27 and 28: Filing documents with specified New Zealand
patents officials
[s 214]
These items amend the Patents Act to permit prescribed documents filed with one of the
specified New Zealand patents officials to be taken to be filed at the Patent Office. This
will save applicants having to file the same document in both Australia and
New Zealand: for example, applications for grant of a patent for the same invention in
each country.
The specified New Zealand patents officials are:
o the New Zealand Commissioner
91
o a New Zealand Assistant Commissioner of Patents
o a person who is a delegate of the New Zealand Commissioner under New
Zealand law.
The regulations would prescribe the documents that might be filed with those New
Zealand patents officials, and the allowed means of filing them. For example, an
application for grant of a standard patent in Australia could be prescribed.
As the New Zealand Commissioner intends to require documents to be filed
electronically by particular means, those electronic means would be prescribed for the
document in the regulations. As a result, that would be the only means of filing the
document with the New Zealand Commissioner that would result in a valid filing under
the Australian patents legislation.
The regulations could also prescribe when a prescribed document filed by the prescribed
means with a New Zealand patent official is taken to have been filed at the Patent
Office. It is proposed that the regulations would provide that the time of filing in New
Zealand is taken to be the time in Canberra, Australia when all of the information in the
document enters the IT systems provided in New Zealand for electronic filing.
Some prescribed fees are due when filing some documents (e.g. an application for grant
of a standard patent in Australia). Item 37 amends the Patents Act to permit those fees to
be paid in New Zealand dollars to New Zealand patents officials.
Under the single application system, the Patent Office will also receive applications for
the grant of patents in New Zealand. The New Zealand legislation will provide for the
effect of such filings in New Zealand.
Items 29 to 32: Service of documents in Australia and New Zealand
[s 221]
These items broaden the allowable addresses for service of documents under the Patents
Act, and provide flexibility in specifying the means of service.
Currently, an address for service under the Patents Act must be a physical or postal
address in Australia, and the permitted means of service are by post or personal delivery
to that address (see also section 28A of the Acts Interpretation Act 1901).
Item 30 amends the Patents Act to allow an address in Australia or New Zealand to be
an address for service of documents. As a result any person applying for grant of a
patent in Australia will be able to nominate an address in either Australia or
New Zealand as their address for receiving notices and other documents from the
Commissioner of Patents (e.g. evidence filed by a person opposing grant of the patent
under section 59 of the Patents Act).
Item 31 amends the Patents Act to allow a document to be served on an address for
service in Australia or New Zealand by means prescribed in the regulations. Initially, the
prescribed means would be those currently available: by post. This means that for the
purposes of an application for grant of a patent in Australia, the address for service must
be a physical or postal address in either Australia or New Zealand.
92
In future, IP Australia proposes to develop electronic means for routinely and securely
serving notices on electronic addresses in Australia or New Zealand. When appropriate
means are available, these may be prescribed in the regulations.
There might be some uncertainty about whether an electronic address can be an address
for service in Australia or in New Zealand. To put this beyond doubt, item 32 inserts
new subsections 221(2) to (5) to allow an electronic address to be an address for service
in Australia or in New Zealand. This will apply from a time specified in regulations, but
not before those regulations are registered in the Register of Legislative Instruments
under the Legislative Instruments Act 2003. The question of whether a particular
electronic address is in Australia or in New Zealand is to be determined in accordance
with the regulations.
For example, the regulations might provide that a document could be served by
transmitting the information in it to a digital mail-box in Australia or New Zealand
nominated by the person to be served. The regulations would provide that the digital
mail-box is an address for the purposes of section 221. Permitted addresses could also
include a digital mail-box set up by IP Australia or by the Intellectual Property Office of
New Zealand: if the person to be served nominates that digital mail-box.
These amendments do not affect the rules of courts or tribunals governing service. The
courts and tribunals decide what constitutes effective service in proceedings before
them, including service on persons outside Australia.
Items 33 and 34: Extensions of time for errors or omissions of New
Zealand delegates
[s 223]
These items amend the Patents Act to remedy any default in doing a relevant act in time
owing to an error or omission by a New Zealand delegate of the Australian
Commissioner (see item 25), just as such defaults owing to errors or omissions by
Australian officials and employees in the Patent Office can be remedied.
The Australian Commissioner must extend the time for doing the relevant act--if it is
not done (or cannot be done) because of the error or omission of an Australian official or
employee or a New Zealand delegate.
Item 34 inserts new subsections 223(1A) and 223(1B) stating that, for the purposes of
subsection 223(1) of the Patents Act, it is immaterial whether
o the relevant act took place or is to take place in New Zealand
o the error or omission preventing the act being done in time took place in New
Zealand.
This puts it beyond doubt that the Australian Commissioner is able to extend the time
for doing a relevant act if the relevant act or the error or omission took place in New
Zealand. See the notes for items 14 and 15 above.
93
Item 35: Administrative Appeals Tribunal review
[s 224]
This item amends the Patents Act to ensure that the decisions of New Zealand delegates
of the Australian Commissioner are subject to review by the Administrative Appeals
Tribunal (AAT review`) just as decisions of Australian delegates are reviewable.
Generally, Australian legislation is presumed to only apply in Australia. See the notes to
items 14 and 15.
New subsection 224(3A) states that it is immaterial for the purposes of section 224
whether a decision was made in New Zealand. That is, decisions under any of the
provisions listed in paragraphs 224(1)(a), (b) and (c) are reviewable whether they are
made in Australia or New Zealand.
Paragraph 224(1)(a) of the Patents Act lists the powers and functions of the Australian
Commissioner that are subject to AAT review. These powers and functions are not
usually exercised by Australian examiners of patents. They are therefore not expected to
be delegated to New Zealand delegates examining Australian patent applications.
However, in the future the Australian and New Zealand Governments might agree to one
or more of those powers or functions being exercised or performed by New Zealand
patents officials.73
In contrast to the decisions under the provisions listed in paragraph 224(1)(a), those
listed in paragraphs 224(1)(b) and (d) are always expected to be made in Australia:
o a decision of the Designated Manager under section 198 not to register a person
as a patent attorney
o a decision of the Director of Safeguards under sections 147, 149 or 152 of the
Patents Act on the handling of patent applications containing associated
technology` for the purposes of the Nuclear Non-Proliferation (Safeguards) Act
1987.74
So new subsection 224(3A) is not expected to have any practical effect on the
reviewability of those decisions.
Items 36 and 37: Payment of Australian fees in New Zealand
[s 227]
These items amend the Patents Act to permit a fee prescribed in the Australian
legislation to be paid in New Zealand currency to a New Zealand patents official
authorised to receive the fee on behalf of the Commonwealth, so as to meet the
requirement to pay the fee in Australia. This will allow someone filing an Australian
patent document with a New Zealand patent official to pay any fee due at filing, without
having to make a separate payment in Australia (see also item 28).
73
See the notes on items 24 to 26 for discussion of the proposed bilateral instrument.
74
The Director of Safeguards is established by section 42 of the Nuclear Non-Proliferation (Safeguards)
Act 1987; see subsection 4(1) of that Act for the definition of associated technology`: it includes
documents containing information about the design or production of nuclear weapons.
94
The relevant New Zealand patents officials are:
o the New Zealand Commissioner
o a New Zealand Assistant Commissioner of Patents
o a person who is a delegate of the New Zealand Commissioner under New
Zealand law.
For example, someone could file with the New Zealand Commissioner applications for
the grant of patents in Australia and New Zealand for the same invention. At the same
time, the person could pay a single amount in New Zealand dollars, comprising the New
Zealand filing fee and the New Zealand dollar amount of the Australian filing fee.
The regulations will provide for working out the New Zealand dollar amounts of the
Australian fees. These will reflect the terms of an instrument to be established between
senior officials in IP Australia and the New Zealand Ministry of Business Innovation &
Employment for setting these amounts.
It is proposed that the instrument will also require that the money received by the New
Zealand patents officials on behalf of the Australian government be held in trust and be
reconciled periodically. Australian patents officials and employees will also receive
Australian dollar payments of New Zealand fees on behalf of the New Zealand
government (see new s227AA inserted by item 38 below).
Item 38: Payment of New Zealand fees in Australia; Application of
administrative law regime to decisions made in New Zealand
[s 227AA]
This item inserts new section 227AA into the Patents Act to permit officials and
employees in the Patent Office to receive specified New Zealand fees in Australian
dollars. This will allow someone filing a New Zealand patent document at the Patent
Office to pay any fee due at filing, without having to make a separate payment in
New Zealand.
For example, someone could file at the Patent Office applications for the grant of patents
in Australia and New Zealand for the same invention. At the same time, the person
could pay a single amount in Australian dollars, comprising the Australian filing fee and
the Australian dollar amount of the New Zealand filing fee.
The regulations will provide for working out the Australian dollar amounts of the New
Zealand fees. These will reflect the terms of an instrument to be concluded between
senior officials in IP Australia and the New Zealand Ministry of Business Innovation &
Employment for setting these amounts.
It is proposed that the instrument will also require that the money received by
IP Australia on behalf of the New Zealand government be held in trust and be reconciled
periodically. New Zealand officials will also receive Australian dollar payments of New
Zealand fees on behalf of the Australian government (see item 37).
The Australian dollar amounts that IP Australia collects on behalf of the New Zealand
government would be paid into a Special Account established by a determination of the
95
Finance Minister under section 20 of the Financial Management and Accountability Act
1997.75
[s 227AB]
Item 38 also inserts new section 227AB into the Patents Act. This new section ensures
that decisions made in New Zealand under the Australian Patents Act and its regulations
are subject to judicial or administrative review, just as are decisions made in Australia.
New subsections 227AB(1) and (2) ensure that the following persons can seek judicial
review in the Federal Court of Australia under the Administrative Decisions (Judicial
Review) Act 1977 (AD(JR) Act review`)
o an individual or company affected by a decision of the Trans-Tasman IP
Attorneys Board or the Trans-Tasman IP Attorneys Disciplinary Tribunal--
whether the Board or the Tribunal make the decision in Australia or New
Zealand.76
o anyone affected by a decision of a New Zealand delegate exercising or
performing one of the Australian Commissioner`s powers or functions (see item
25).
By way of example, the Board might decide that an individual--whose only academic
qualification is a Bachelor of Laws degree--does not have an appropriate qualification
to be a patent attorney. This is because the particular degree course is not in a field of
science or technology containing potentially-patentable subject matter. This decision
would prevent the individual from being registered as a patent attorney, without
undertaking a further course of appropriate study.77
It is immaterial whether the Board`s decision is made when the members of the Board
are sitting together in New Zealand, are sitting together in Australia or are meeting by
video-conference from several locations in Australia and New Zealand. In any of these
cases, the individual would have the same right to seek AD(JR) Act review.78
New subsections 227AB(3) and (4) will ensure that the decisions subject to
Administrative Appeals Tribunal (AAT review`) under the Patents Act and its
regulations will be reviewable whether they are made in Australia, in New Zealand or in
Australia and New Zealand (see below). See the notes on item 35 above for discussion
of the decisions under the Patents Act that are subject to AAT review. See regulation
22.26 of the Patents Regulations 1991 for the decisions made under the Patents
Regulations that are subject to AAT review.
75
For example, see the Services for other Entities and Trust Moneys--IP Australia Special Account
established under the Financial Management and Accountability (Establishment of Special Account for IP
Australia) Determination 2011/11
76
The Board is the Professional Standards Board continued as the Trans-Tasman IP Attorneys Board (see
item 40). The Trans-Tasman IP Attorneys Disciplinary Tribunal will be established by regulations made
under paragraph 228(2)(r) of the Patents Act.
77
See currently regulation 20.6 of the Patents Regulations 1991, which refers to decisions of the
Professional Standards Board
78
Alternatively, the individual might seek Administrative Appeals Tribunal review of the decision under
regulation 20.5 (evidence of academic qualifications`): see currently regulation 22.26(2)(b)(i).
96
By way of example, the Trans-Tasman IP Attorneys Disciplinary Tribunal
(Disciplinary Tribunal`) will hear disciplinary proceedings brought by the Board
against a registered patent attorney. Each disciplinary matter will be heard by a three-
member panel drawn from a larger pool` of members residing in Australia or New
Zealand, who must be legal practitioners, patent attorneys or former patent attorneys.
When disciplinary proceedings are brought against a New Zealand-resident attorney, the
panel will include at least one member who ordinarily resides in New Zealand.
For instance, if disciplinary proceedings were brought against a New Zealand-resident
attorney (the charged attorney`), the three-member panel of the Disciplinary Tribunal
will include a New Zealand-resident patent attorney. The Disciplinary Tribunal might, at
its discretion, choose to:
o sit together in New Zealand to hear the charged attorney and witnesses in person
o sit together in Australia, with the charged attorney and the witnesses appearing
remotely from New Zealand by video-conference79
o sit in Australia and New Zealand by video-conference, with the charged attorney
and the witnesses also appearing remotely from New Zealand by video-
conference.80
It is immaterial whether the decision of the Disciplinary Tribunal following the hearing
is made in Australia, New Zealand or in both Australia and New Zealand. In all of these
cases, an attorney found guilty by the Disciplinary Tribunal has exactly the same right to
seek AAT review.81
Items 39 to 46: Trans-Tasman IP Attorneys Board
[s 227A]
These items amend the Patents Act to continue the Professional Standards Board for
Patent and Trade Marks Attorneys under the new name the Trans-Tasman IP Attorneys
Board` (the Board`) and with a new constitution reflecting the extended role of the
Board as:
o the regulator of individuals and companies registered as patent attorneys in both
Australia and New Zealand under the Patents Act
o the regulator of individuals and companies registered as trade mark attorneys in
Australia under the Trade Marks Act.
IP` refers to intellectual property: including patents, trade marks, designs, and plant
breeder`s rights.
For ease of reference, the Trans-Tasman IP Attorneys Board is referred to as the Board`
throughout the rest of the Patents Act: see the definition of the Board` in item 49.
79
It is proposed that regulations would be made under Division 2 of Part 6 of the Trans-Tasman
Proceedings Act 2010 prescribing the Disciplinary Tribunal and the Administrative Appeals Tribunal as
Australian tribunals
80
See above
81
Currently, see regulation 22.26 (2) (d) of the Patents Regulations 1991
97
Substitute subsection 227A(1) continues the Professional Standards Board in existence
under its new name and constitution. This ensures that any disciplinary proceedings the
Professional Standards Board is conducting before commencement are not terminated by
its renaming and re-constituting.
New subsections 227A(2A) and (2B) provide that the Board consists of up to
ten members:
o a Chair
o the Director-General of IP Australia, who is one of the two ex officio members
on the Board.
o the New Zealand Commissioner, who is the other of the two ex officio members.
o at least two ordinary members nominated by the New Zealand Patents Minister82
to represent the New Zealand patent attorney profession
o at least two other ordinary members.
New subsection 227A(2D) requires that the Chair and the ordinary members must have
substantial experience or knowledge, and significant standing, in one or more of these
fields:
o Australian or New Zealand patent attorney practice
o Australian trade mark attorney practice
o the regulation of persons engaged in a prescribed occupation. This is to allow
experienced regulators of professionals to become Board members
o public administration
o academia.
Under new subsections 227A(2C) and (2F), the Australian Minister of State who
administers the Patents Act (the Minister`) appoints the Chair and the ordinary
members by written instrument for the following periods:
o the Chair--for a period of up to three years
o the ordinary members including the members nominated by the New Zealand
Patents Minister--for periods of up to five years.
It is expected that the position of Chair would usually be occupied alternately by
someone ordinarily resident in Australia (Australian resident`) and then by someone
ordinarily resident in New Zealand (New Zealand resident`) on a three-year cycle.
In a cycle, any vacancy would usually be filled for the rest of that cycle by someone else
resident in the same country as the former chair. For example, say the Minister appoints
a person ordinarily resident in Australia as Chair for a three-year term and the Chair
resigns at the end of two years. The Minister would usually appoint another Australian
resident as Chair for the remaining twelve months of the three-year period. If there was
no suitable Australian resident willing to be Chair for the rest of the period, the Minister
might appoint a suitable New Zealand resident for a three-year term.
82
See the definition in item 56
98
The three-year maximum period for the Chair, and the expected alternation of the
country of residence of its occupant, will ensure that there are no long intervals between
either country`s interests being represented at the highest level on the Board. The five-
year maximum for the appointment of the ordinary members and the ongoing role of the
two ex officio members allow them to support each newly appointed Chair with a depth
of current experience. The Minister might re-appoint the ordinary members for further
terms.83 Although it is possible for the Minister to appoint someone who is or was an
ordinary member to the office of Chair, it is not appropriate for that person to hold both
of those offices at the same time.
The members of the Board would hold office on a part-time basis (new subsection
227A(2E)). Existing subsection 227A(4) provides for members of the Board to be paid
remuneration determined by the Remuneration Tribunal. Substitute
paragraph 227A(3)(a) inserted by item 43 will allow the regulations to specify the other
terms and conditions on which the Chair and the ordinary members hold office. The ex
officio members do not receive the remuneration or allowances paid to the Chair or the
ordinary members of the Board: as public servants; they are already duly remunerated
and paid allowances for performing their official duties.
New subsections 227A(2G) to (2M) permit the ex officio members to deputise public
servants to attend Board meetings in their place. These deputies are also not entitled to
any remuneration or allowances for attending a meeting, other than what they are
usually paid for undertaking their duties as public servants.
Item 43 repeals paragraph 227A(3)(a) which permits regulations to be made for and in
relation to the constitution and membership of the Professional Standards Board. This
regulation-making power is no longer appropriate, as the constitution and membership
of the Board is now set out in section 227A (see above). In place of that power, this item
substitutes new provisions for making regulations governing the Chair and the ordinary
members of the Board relating to:
o the terms and conditions on which they hold office (see discussion above)
o how they may resign their appointments
o how their appointments may be terminated.
Items 41, 44 and 45 replace several references in section 227A of the Patents Act to the
Professional Standards Board with references to the Board, as a consequence of its
renaming (see items 40 and 49).
Item 46 inserts new subsection 227A(7) stating that the Board may perform its functions
in Australia or New Zealand. This puts it beyond doubt that the Board can operate as a
trans-Tasman Board: whether in Australia, in New Zealand or in both Australia and New
Zealand (i.e. meeting by audio-conference or video-conference from several locations in
Australia and New Zealand).84
83
See section 33AA of the Acts Interpretation Act 1901
84
See the discussion of new section 227AB, inserted by item 38 above.
99
Item 47: Reference to the Professional Standards Board
[s228]
This item replaces a reference to the Professional Standards Board in subparagraph
228(2)(r)(ia) of the Patents Act with reference to the Board, as a consequence of its
renaming (see items 40 and 49). That subparagraph is inserted by item 28 in Schedule 4
to the Raising the Bar Act, with effect from 15 April 2013.
Item 48: Regulations for matters in Australia or New Zealand
[s228]
This item inserts new subsections 228(4A) to (4E) into the Patents Act. These new
subsections ensure that the Patents Regulations can provide appropriately for:
o functions to be performed, or powers to be exercised, in New Zealand
o Administrative Appeals Tribunal review of decisions made in New Zealand
o any matters (including acts or omissions) governed by the Patents Regulations,
which happen to take place in New Zealand.
As a result, the Patents Regulations will be able to govern the conduct of registered
patent attorneys in New Zealand, including providing for their discipline there by the
Board and by the Trans-Tasman IP Attorneys Disciplinary Tribunal.85
The Patents Regulations confer powers and functions on the Australian Commissioner,
who may delegate them to New Zealand patents officials (see item 25 above). Those
regulations will also be able to make any necessary provision for the exercise or
performance in New Zealand of those delegated powers or functions.
Items 49 to 59: Amendments to Schedule 1 (definitions)
The following items amend Schedule 1 of the Patents Act to insert, amend or repeal
definitions of expressions used in that Act and its regulations.
Items 49 and 58 Board` and Professional Standards Board`
Item 49 inserts the definition of the expression Board` as the Trans-Tasman IP
Attorneys Board continued in existence by substituted subsection 227A(1) (see item 40).
Item 58 repeals the definition of the expression Professional Standards Board` as a
consequence of it being replaced throughout the Act by the expression Board` (see
items 41 to 45 and 47).
Item 50 company
This item repeals the definition of the expression company`86, and substitutes a new
definition referring to a company registered under the Australian or the New Zealand
corporations legislations. This puts it beyond doubt that a provision in the Patents Act
85
The Board is the Professional Standards Board continued as the Trans-Tasman IP Attorneys Board (see
item 40). The Trans-Tasman IP Attorneys Disciplinary Tribunal will be established by regulations made
under paragraph 228(2)(r) of the Patents Act.
86
Inserted by item 29 in Schedule 4 to the Raising the Bar Act (with effect from 15 April 2013)
100
referring to a company also governs New Zealand companies. See for example, the
provisions for registering companies as incorporated patent attorneys in new subsections
198(9) to (11) of the Patents Act.87 See also Part 2 of Chapter 20 of the Patents Act for
the offences committed by companies that are not registered as patent attorneys.88
Item 51 Director-General of IP Australia
This item inserts the definition of the expression Director-General of IP Australia`. For
examples of its use, see new subsections 227A(2A) and (2G) to (2J) inserted by item 42.
Item 52 file
This item inserts a note to the definition of the expression file`, pointing the reader to
section 214 which is amended by item 28.
Item 53 New Zealand Assistant Commissioner of Patents
This item inserts the definition of the expression New Zealand Assistant Commissioner
of Patents`. For examples of its use, see new subsections 214(2) and 227(6) inserted by
items 28 and 37 respectively. Currently, section 4 of the Patents Act 1953 (NZ) provides
for one or more persons to be Assistant Commissioners of Patents. The Patents Bill
currently before the New Zealand Parliament would, if enacted, continue these offices.89
Item 54 New Zealand Commissioner of Patents
This item inserts the definition of the expression New Zealand Commissioner of
Patents`. For examples of its use, see new subsections 214(2), 227(6) and 227A(2A)
inserted by items 28, 37 and 42 respectively. Currently, section 3 of the Patents Act
1953 (NZ) provides for a Commissioner of Patents. The Patents Bill currently before the
New Zealand Parliament would, if enacted, continue this office.90
Item 55 New Zealand delegate
This item inserts the definition of the expression New Zealand delegate` as a New
Zealand patents official who is a delegate under subsection 209(1A) (see item 25). The
expression New Zealand patents official` is defined in turn in item 57.
Item 56 New Zealand Patents Minister
This item inserts the definition of the expression New Zealand Patents Minister`, used
in new paragraph 227A(2A)(d) inserted by item 42.
Item 57 New Zealand patents official
This item inserts the definition of the expression New Zealand patents official` used in
new subsections 209(1A) and 227A(2K) inserted by items 25 and 42 respectively.
87
inserted by item 21 in Schedule 4 to the Raising the Bar Act (with effect from 15 April 2013)
88
As amended by items 24 to 27 in Schedule 4 to the Raising the Bar Act (with effect from 15 April 2013)
89
See clause 266 of the Patents Bill 235-2 available at
http://www.legislation.govt.nz/bill/government/2008/0235/latest/versions.aspx
90
See note 74 above.
101
Item 59 Registrar of Companies of New Zealand
This item inserts the definition of the expression Registrar of Companies of New
Zealand` used in new subsection 183(3) inserted by item 16.
Plant Breeder's Rights Act 1994
Items 60 to 68: Service of documents in Australia or New Zealand
[s 3, s 19, s 21, s 26, s 31 and 73]
These items broaden the allowable addresses for service of documents under the Plant
Breeder`s Rights Act, and provide flexibility in specifying the means of service.
Currently, an address for service of documents (including notices) under the Plant
Breeder`s Rights Act (PBR Act`) must be a physical or postal address in Australia, and
the permitted means of service are by postal or personal delivery to that address (see
also section 28A of the Acts Interpretation Act 1901).
These items amend the PBR Act to allow an address in New Zealand to be an address
for service of documents. As a result any person seeking plant breeder`s rights (PBR) in
Australia will be able to nominate an address in Australia or New Zealand as their
address for receiving documents from the Secretary or the Registrar of Plant Breeder`s
Rights.
Item 68 repeals the existing provision in section 73 of the PBR Act for the service of
documents, substituting a new provision allowing a document to be served on an address
for service in Australia or New Zealand by means prescribed in the regulations. Initially,
the prescribed means would be those currently available: by post.
In future, IP Australia proposes to develop electronic means for routinely and securely
serving notices on electronic addresses in Australia or New Zealand. When appropriate
means are available, these may be prescribed in the regulations.
There might be some uncertainty about whether an electronic address can be an address
for service in Australia or in New Zealand. To put this beyond doubt, new subsections
3(2) to (6) substituted by item 61 allow an electronic address to be an address for the
purposes of the PBR Act. This will apply from a time specified in regulations, but not
before those regulations are registered in the Register of Legislative Instruments under
the Legislative Instruments Act 2003. The question of whether a particular electronic
address is in Australia or in New Zealand is to be determined in accordance with the
regulations.
Several addresses required in an application for PBR must continue to be physical
addresses: the address of the applicant, that of any Australian or New Zealand agent and
that of the breeder (if the breeder is not the applicant). See new subsection 3(4) inserted
by item 61, which ensures that several references to addresses in existing subsections
26(2) and (3) do not include electronic addresses..
These amendments do not affect the rules of courts or tribunals governing service. The
courts and tribunals decide what constitutes effective service in proceedings before
them, including service on persons outside Australia.
102
Neither Australia nor New Zealand registers specialists to assist businesses to obtain and
maintain PBR.
Trade Marks Act 1995
Items 69 to 72 and 79 to 81: Replacing references to the Professional
Standards Board with references to the Board
[Readers guide, s 6, s 228A and s 231]
These items amend the Trade Marks Act by replacing several references to the
Professional Standards Board with reference to the Board, as a consequence of its
renaming (see items 40 and 49). Items 71 and 72 repeal the definition of the expression
Professional Standards Board`, and define the expression Board` as having the same
meaning as in the Patents Act 1990.
Just as the Professional Standards Board has now, the Trans-Tasman IP Attorneys Board
will have a central role in accrediting persons for registration as trade marks attorneys,
and in the discipline of registered trade marks attorneys.
Items 73 to 78: Service of documents in Australia or New Zealand
[s 215]
These items broaden the allowable addresses for service of documents under the Trade
Marks Act, and provide flexibility in specifying the means for service of those
documents.
Currently, an address for service under the Trade Marks Act must be a physical or postal
address in Australia, and the permitted means of service are by postal or personal
delivery to that address (see also section 28A of the Acts Interpretation Act 1901).
Item 73 amends subsection 215(5) of the Trade Marks Act to allow an address in
Australia or New Zealand to be an address for service of documents under that Act. As a
result any person seeking trade mark protection in Australia will be able to nominate an
address in Australia or New Zealand as their address for receiving notices from the
Registrar of Trade Marks.
Item 74 repeals and substitutes paragraph 215(6)(a) of the Trade Marks Act so that a
document may be served on an address for service in Australia or New Zealand by
means prescribed in the regulations. Initially, the prescribed means are proposed to be
those currently available: by post. In future, IP Australia proposes to develop electronic
means for routinely and securely serving notices on addresses in Australia or New
Zealand. When appropriate means are available, these may be prescribed in the
regulations.
There might be some uncertainty about whether an electronic address can be an address
in Australia or in New Zealand. To put this beyond doubt, item 78 inserts new
subsections 215(8) to (11) to allow an electronic address to be an address in Australia or
in New Zealand for the purposes of section 215. This will apply from a time specified in
regulations, but not before those regulations are registered in the Register of Legislative
103
Instruments under the Legislative Instruments Act 2003. The question of whether a
particular electronic address is in Australia or in New Zealand is to be determined in
accordance with the regulations.
Paragraph 215(6)(b) of the Trade Marks Act currently addresses the case of a person
who does not have an address for service in Australia. In that case, a document may be
served on an agent of the person in Australia, or be sent by post to any address of the
person in Australia that is known to the Registrar. By analogy with the amendments
made by items 73 and 74, items 75 to 77 will ensure that the document may be:
o served on an agent of the person in Australia or New Zealand
o be sent by a prescribed means to any address of the person in Australia or
New Zealand known to the Registrar.
These amendments do not affect the rules of courts or tribunals governing service. The
courts and tribunals decide what constitutes effective service in proceedings before
them, including service on persons outside Australia.
In Australia, patent attorneys, trade marks attorneys and legal practitioners advise
businesses on how to protect their trade marks. New Zealand does not register specialist
trade marks protection professionals.
Part 2--Transitional provisions
Item 82: Transitional registration of New Zealand patent attorneys as
Australian patent attorneys
This item provides that all patent attorneys registered in New Zealand, but not in
Australia, will be entered into the Australian Register of Patent Attorneys. This will
allow the Australian register to become the single trans-Tasman register of patent
attorneys.
Shortly after commencement, the Designated Manager will register the patent attorneys
currently registered in New Zealand, who are not also currently registered in Australia.
These attorneys will not be required to apply for this transitional registration, or meet the
usual requirements for registration under section 198 of the Patents Act 1990. Nor will
they be required to pay an application or registration fee. Depending on when the
schedule commences, they may, however, have to pay the annual renewal fee for the
next year shortly after their registration in Australia. That fee falls due on 1 July of each
year.
Item 83: Transitional qualification of persons who had not yet
completed the New Zealand registration exams
This item allows regulations to be made to ensure that persons who are not registered in
New Zealand as patent attorneys at commencement, but who have commenced the
qualifying examinations in New Zealand will not be disadvantaged by the new regime.91
91
The New Zealand qualifying examinations are conducted under Part 30 of the Patents Regulations 1954
(NZ), available via http://www.legislation.co.nz/regulation/public/1954/0211/latest/versions.aspx. Part 30
will not be affected by the enactment of the Patents Bill currently before the New Zealand Parliament: see
Paragraph 295A(2)(d) of the Patents Bill 235-2 available at
http://www.legislation.govt.nz/bill/government/2008/0235/latest/versions.aspx
104
A person who passes at least one of those qualifying examinations before
commencement, and passes all the rest of the examinations within four years of
commencement, will be able to apply for registration in Australia without obtaining any
further qualification. In particular, the candidate will not be required to meet the
academic or knowledge requirements prescribed under paragraph 198(4)(b) of the
Patents Act 1990.92 The candidate will have to comply with the other requirements
under subsection 198(4): prescribed employment, good character and non-criminality.
To rely on this provision, the candidate must apply for registration within six months of
receiving written notification that all examinations have been passed, but this six-month
period for applying may end after the four-year period for completing the examinations.
This exemption from the usual requirements ceases to apply to a candidate who fails to
pass all the examinations within the four-year period, or fails to apply for registration
within six months of receiving written notification that all examinations have been
passed. It will be open to such a candidate to undertake any necessary tertiary study to
meet the usual academic and knowledge requirements for registration in Australia. The
Board may, in its discretion, accept that the qualifying examinations such a candidate
has passed in New Zealand address some or all the Australian knowledge requirements.
Item 84: Deregistration of patent attorneys for conduct in New
Zealand before commencement
This item allows regulations to be made prescribing grounds for deregistration of patent
attorneys relating to their conduct in New Zealand before the commencement of the new
regime. Section 199 of the Patents Act allows patent attorneys to be deregistered on the
prescribed grounds (see also item 23 above).
This is to ensure that some effect can be given to a decision of a New Zealand court in
disciplinary proceedings against a patent attorney registered in New Zealand. Under
section 102 of the Patents Act 1953 (NZ), the New Zealand Commissioner or the New
Zealand Institute of Patent Attorneys Incorporated (with leave in writing of the New
Zealand Attorney-General) may apply to the New Zealand High Court for removal of a
patent attorney`s name from the New Zealand register of patent attorneys or suspension
of the attorney from practice. The court may order the removal or suspension on several
grounds, including conviction of a crime of dishonesty, professional misconduct or
grave impropriety.93
New Zealand advises that such actions are rare. Nevertheless, this provision will
continue to apply to all such conduct committed in New Zealand before the
commencement of the new regime. That is, even after commencement, new actions for
removal or suspension may be begun in the New Zealand High Court.
Regulations made for the purposes of section 199 will prescribe deregistration of an
attorney on the grounds specified in the section 102 of the Patents Act 1953 (NZ). The
Designated Manager must remove a patent attorney`s name from the register, if the New
Zealand Commissioner advises the Designated Manager in writing that:
92
The academic and knowledge requirements are currently prescribed in regulations 20.6 and 20.8 of, and
Schedule 5 to, the Patents Regulations 1991.
93
See via http://www.legislation.govt.nz/act/public/1953/0064/latest/DLM281010.html
105
o the New Zealand High Court has determined that a person should not practise as
a patent attorney in New Zealand, whether indefinitely or for some fixed period
o the decision is final--all rights of appeal in New Zealand have been exhausted
and the decision still stands.
Item 85: Transitional registration of New Zealand patent attorneys as
Australian trade marks attorneys
This item allows New Zealand-registered patent attorneys to be transitionally registered
as trade marks attorneys in Australia in appropriate cases. The New Zealand patent
attorney must apply to the Designated Manager--within 12 months of the legislation
commencing--with evidence:
o demonstrating the attorney`s competence in trade mark law and practice to the
Designated Manager`s satisfaction. This need not be a specific or substantial
competency in Australian trade mark law and practice. It will suffice that the
individual`s level of competency in trade marks law and practice in Australia or
New Zealand is sufficient to warrant the individual becoming a registered trade
marks attorney in Australia.
o that in the previous five years the attorney has not been convicted in Australia or
New Zealand of a prescribed offence. It is proposed to prescribe offences against
either country`s intellectual property legislation. These are what would be
prescribed under paragraph 198(4)(e) of the Patents Act for individuals seeking
registration as patent attorneys. See the notes on items 20 and 21 above.
o that the attorney is not under sentence of imprisonment in Australia or
New Zealand for a prescribed offence. It is proposed to prescribe offences of
dishonesty with a maximum penalty of at least two years imprisonment, just as
would be prescribed under paragraph 198(4)(f) of the Patents Act.
New Zealand does not have a trade marks attorney profession. Instead some
New Zealand-registered patent attorneys specialise in trade marks work. Those
New Zealand attorneys will become Australian patent attorneys under the single trans-
Tasman patent attorney regime (see item 82 above). Registration as a patent attorney
does not, however, allow anyone to market oneself as a trade marks attorney in
Australia.94 This requires registration as an Australian trade mark attorney.
In contrast to the automatic transitional registration of New Zealand patent attorneys
under item 82, transitional registration as an Australian trade marks attorney is
discretionary. It will require consideration of an individual`s competency in trade marks
law and practice. Accordingly, the transitional applicant will have to pay a prescribed
application fee. This would be set to the same amount as that paid for ordinary
applications for registration as a trade marks attorney (currently $300).
94
See the offence in subsection 156(1) of the Trade Marks Act 1995, as substituted by item 46 in Schedule
4 to the Raising the Bar Act (with effect from 15 April 2013)
106
Schedule 6--Other Amendments
Introduction
Part 1 of this schedule removes the document retention requirements in the Patents Act,
Trade Marks Act and the Designs Act. This ensures that IP Australia`s retention of
documents is governed solely by the Archives Act 1983 and its records disposal
authorities. This will allow redundant physical documents to be disposed of sooner,
reducing Government expense.
The legislation administered by IP Australia currently requires patents, trade marks and
designs documents filed at IP Australia to be physically stored for an extended period of
time. For example, the application documents for a trade mark cannot be destroyed until
25 years after the registration has ceased.
The retention and disposal of documents is already comprehensively governed by the
Archives Act and the records disposal authorities issued by the National Archives of
Australia. However, the patents, trade marks and designs legislation often require
documents to be retained for longer periods of time than would otherwise be required by
the National Archives. This leads to unnecessarily long retention periods and significant
Government expense in maintaining warehouse facilities for documents that are no
longer relevant.
Part 2 of this schedule addresses a number of minor oversights in the drafting of the
Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Raising the Bar
Act`). The Raising the Bar Act made a series of reforms to Australia`s intellectual
property system, with effect from 15 April 2013.
Part 1--Document Retention
Items 1 and 2: Designs Act 2003
[s 69]
These items remove the requirement for the Registrar of Designs to retain material
provided under section 69(1) of the Designs Act. Retention of this material will continue
to be governed by the Archives Act, as outlined in the introduction to this schedule.
Item 3: Patents Act 1990
[s 228]
This item removes the provision in the Patents Act that enables the Governor-General to
make regulations that prevent documents relating to patent applications being scheduled
for destruction before 25 years have elapsed from the filing date of the patent
application. Retention of these documents will continue to be governed by the Archives
Act, as outlined in the introduction to this schedule.
Item 4: Trade Marks Act 1995
[s 231]
107
This item removes the provision in the Trade Marks Act that enables the
Governor-General to make regulations that prevent documents relating to a trade mark
being scheduled for destruction before 25 years have elapsed from the date that
registration of the trademark ceased. Retention of these documents will continue to be
governed by the Archives Act, as outlined in the introduction to this schedule.
Item 5: Application of amendments
Amendments made by this schedule apply in relation to material and documents
provided or filed before, on or after commencement.
Part 2--Technical amendments
Item 6: Heading replacement
[s 24]
This item is a consequential amendment to the heading of section 24 of the Patents Act,
to reflect amendments made to section 24 in item 32 of Schedule 6 to the Raising the
Bar Act.
Item 7: Requests from PCT applicants prior to national phase entry
[s 29A]
This item amends the Patents Act to reinstate the requirement that an international
applicant under the Patent Cooperation Treaty (PCT) cannot require that anything be
done under the Patents Act for their PCT application--unless it enters national phase in
Australia. For that to happen, the international applicant must pay the prescribed fees
and file prescribed documents, as mentioned in the new subsection 29A(5) of the Act. If
the PCT application is not in English, a translation must also be filed.
Under the PCT, an international applicant has 31 months from the earliest priority date
of their PCT application to enter the national phase in Australia. Prior to the
commencement of item 67 of Schedule 6 to the Raising the Bar Act, subsection 89(3) of
the Patents Act provided that a PCT applicant was not entitled to ask that anything be
done under that Act, unless their PCT application had entered national phase. This
ensured that they could not request that the Commissioner examine and amend their
application until they had provided the Commissioner with a copy of the application and
paid the appropriate fees.
However, due to an oversight in drafting, the new section 29A inserted by item 34 of
Schedule 6 to the Raising the Bar Act was only phrased as requiring a PCT applicant to
meet the requirements of the new subsection 29A(5) (National Phase Entry) by a certain
period. The new section does not permit the Commissioner to refuse early requests from
the PCT applicant before they have met the requirements of national phase entry. This
could result in applicants requesting examination or amendment before they have paid
their fees or provided a copy of the application to be examined.
Note that the new subsection 29A(6) does not refer to the prescribed period in
subsection 29A(5). This ensures that a PCT applicant who files the translation and
108
prescribed documents, or pays the prescribed fee, outside of the prescribed period, is not
prevented from asking for an extension of time under section 223 to extend the
prescribed period.
Item 8: Prescribing period for Paris Convention applications
[s 29B]
This item amends new subsection 29B(2) of the Patents Act inserted by item 34 of
Schedule 6 to the Raising the Bar Act so that it does not refer to the prescribed period
for Paris Convention applications. The Patents Act provides the prescribing period, with
regard to Paris Convention applications, under two separate sections of the Act: 29B(2)
and 38(1A). The amendment corrects a drafting oversight: the prescribed period was
intended to be under subsection 38(1A), not under subsection 29B(2). This amendment
is to remove duplication only; the prescribed period will remain the same.
Item 9: Subsection heading
[s 40]
This item inserts a subheading above subsection 40(2) to clarify that the subsection
relates to requirements for complete specifications. This follows the amendment made
by item 7 of Schedule 1 to the Raising the Bar Act, which inserted a subheading to
subsection 40(1) of the Patents Act relating to provisional applications.
Item 10: Disclosure requirements for provisional applications for
micro-organism inventions
[s 41]
This item inserts new subsection 41(1A) into the Patents Act to make it clear that a
properly deposited micro-organism can be taken into account for meeting the disclosure
requirements for provisional applications, just as it can for complete applications. This
amendment ensures that applicants` current practice of depositing micro-organisms
meets the requirements of the Patents Act. It does not impose any new obligations on
applicants.
Under the Patents Act, an applicant can either file a complete application or a
provisional application. A provisional application establishes a priority date for a later
complete application that discloses the same invention. Provisional applications are
required to disclose the invention, but unlike complete applications they are not
examined and cannot be refused for a failure to disclose the invention.
Often for inventions related to micro-organisms it is impracticable to describe the
invention in writing. Section 41 of the Patents Act and the Budapest Treaty provide for
the meeting of the disclosure requirement by depositing a sample of the micro-organism
with a prescribed depositary institution.95 However, section 41 applies only to the
95
Australia is party to the Budapest Treaty on the International Recognition of the Deposit of
Microorganisms for the Purposes of Patent Procedure; see section 6 of the Patents Act for the deposit
requirements; see also the definitions of Budapest Treaty, international depository authority and
prescribed depositary institution in Schedule 1 to the Patents Act.
109
disclosure requirement for complete applications, not provisional applications. Item 7 of
Schedule 1 to the Raising the Bar Act imposed a new disclosure requirement for
provisional applications in subsection 40(1) of the Patents Act. However, as an
oversight, no provision was made in section 41 for meeting the new disclosure
requirement in subsection 40(1) in relation to micro-organisms by providing for a
sample micro-organism to be deposited at a prescribed depositary institution. Although
there is no direct consequence for failing to comply with subsection 40(1), it is desirable
to clarify that a properly deposited sample can be relied on for the purpose of subsection
40(1) to avoid any doubt that the applicant has complied with the Patents Act.
The prescribed circumstances under new paragraph 41(1A)(b) will specify the date by
which the deposit must be made, as well as other conditions necessary for the benefit of
the deposit to be obtained.
Item 11: Combination of documents for disclosure of invention
[s 43]
This item amends paragraph 43(2A)(b) of the Patents Act to make it clear that
subsection 43(2) refers not only to a prescribed document, but also to multiple
prescribed documents considered together.
A basic principle of the patents legislation is that a patentee should get protection for no
more and no less than what they disclose about the workings of the invention. In most
cases, the disclosure is a single document. However, in certain circumstances two
documents considered together, but not separately, can provide for this disclosure.
Item 10 of Schedule 1 to the Raising the Bar Act amended subsection 43(2) of the
Patents Act to refer to a prescribed document (in singular form). Although
paragraph 23(b) of the Acts Interpretation Act 1901 ensures that the reference to the
document (singular) includes a reference to document (plural), it is desirable to avoid
any doubt that multiple prescribed documents can be considered together. This item
makes that clear.
Item 12: Disclosure requirements to support the priority date for
micro-organism inventions
[s 43]
This item inserts new subsection 43(2B) into the Patents Act to make it clear that, in
relevant circumstances, a properly deposited sample micro-organism can be taken into
account when determining whether a claimed invention has been disclosed for
determining a priority date of the claim.
As discussed in item 10 above, section 41 of the Act permits the disclosure requirement
in section 40 to be met for an invention related to a micro-organism by deposit of a
sample with a prescribed depositary institution.
Under section 43 of the Patents Act, the priority date of the invention is the date the
invention is first disclosed, either in the specification of the complete application in
which the invention is claimed or in an earlier related patent application. However, due
110
to an oversight, new subsections 43(2) and (2A) inserted by item 10 of Schedule 1 to the
Raising the Bar Act do not account for the situation where the requirement for a
disclosure of an invention relating to a micro-organism can only be met by a deposit
under the Budapest Treaty.96 This item corrects that oversight.
The prescribed circumstances under new paragraph 43(2B)(b) will specify the date by
which the deposit must be made as well as other conditions necessary for the benefit of
the deposit to be obtained.
Item 13: Typographic error
[s 101E]
This item corrects a typographical error by inserting the conjunction and` at the end of
subparagraph 101E(1)(a)(ix) of the Patents Act. The conjunction was inadvertently
omitted when item 21 of Schedule 1 to the Raising the Bar Act substituted a new section
101E of the Patents Act to clarify the obligations of the Commissioner regarding
certificates of examination for innovation patents.
Item 14: Infringement exemption
[s 119]
This item amends paragraph 119(3)(b) of the Patents Act to correct an inadvertently-
created inconsistency between that provision and the related provisions of
paragraph 24(1)(a) of the Patents Act.
Ordinarily, if information about an invention is made publically available before a patent
application is filed for the invention, the invention is not novel and so is unpatentable.
However, section 24 of the Patents Act provides a 'grace period' so that, in certain
circumstances, disclosure of an invention before filing the patent application for it does
not make the invention unpatentable. To balance this against the interests of third parties
who may have relied on the information being in the public domain, paragraph 119(3)(b)
provides a countervailing exception to infringement. A third party does not infringe a
patent if they derived the invention from information made publicly available by the
applicant during the grace period.
Item 32 of Schedule 6 to the Raising the Bar Act amended paragraph 24(1)(a) of the
Patents Act to omit the words 'through the publication or use of the invention'. This was
so that the grace period applies more widely to information made publically available.
However, as an oversight, the same words appearing in paragraph 119(3)(b) were not
also omitted. This item corrects the oversight, ensuring that the grace period and the
countervailing infringement exemption continue to be aligned.
Item 15: Rectification of the Patent Register in respect of entitlement
disputes
[s 191A]
96
See note 101 above
111
This item amends the Patents Act to make it clear that subsection 191A(4) only governs
the right to a hearing in administrative proceedings concerning a person`s entitlement to
a patent or share in it.
Item 79 of Schedule 6 to the Raising the Bar Act introduced a new section 191A
providing for the Commissioner to rectify the Register of Patents. One type of
rectification is for the Commissioner to correct an error in entitlement to the patent.
Before making such a rectification, the Commissioner is required under subsection
191A(4) to hear both the parties currently listed on the Register as being entitled to the
patent and those people claiming that they should be listed as entitled.
However, the rectification power also provides for rectifications that do not relate to
entitlement, for example, corrections of minor errors in the Register (e.g. an incorrectly
recorded address for service). Due to an oversight, the right to a hearing in subsection
191A(4) applies even if the proposed rectification is not related to an entitlement matter.
This item makes it clear that subsection 191A(4) does not apply if the Commissioner
proposes to correct some other type of error in the Register. The existing right to a
hearing under section 216 of the Patents Act and regulation 22.22 of the Patents
Regulations 1991 apply instead.
Item 16: Application of amendments
Sub-item (1): The amendments in items 6 and 14 apply to information that is publicly
available at or after the time those items commence. These items are due to commence
retrospectively, in line with the commencement of item 32 of Schedule 6 to the Raising
the Bar Act. As noted above, these items correct drafting oversights made in preparing
the Raising the Bar Act and seek to clarify existing laws only.
Sub-item (2): The amendments made by items 7 and 8 apply in relation to applications
made at or after the time those items commence.
Sub-item (3): The amendments in item 10 relating to provisional applications apply at
or after commencement.
Sub-item (4): The amendments made by item 11 and item 12 apply in relation to the
following:
o patents for which the complete application is made at or after the time of their
commencement (paragraph a);
o standard patents for which applications had been made before their
commencement, if no request had been made for examination of the application
before their commencement (paragraph b);
o innovation patents granted at or after their commencement, provided the
complete application to which the patent relates had been made before their
commencement (paragraph c);
o complete patent applications made at or after the time of commencement
(paragraph d);
112
o complete applications for standard patents made before commencement, if no
request had been made for examination of the application before that time
(paragraph e);
o complete applications for innovation patents made before their commencement,
if a patent had not been granted in relation to the application on or before that
time (paragraph f);
o innovation patents granted before their commencement, provided the
Commissioner had not decided to examine the complete specification relating to
the patent under section 101A of the Patents Act before that time, and if the
patentee or any other person had not requested examination of the complete
specification relating to the patent under section 101A of the Patents Act before
that time (paragraph g).
Sub-item (5): The amendments made by item 15 apply on and after the date of
commencement in relation to patents granted before, on or after commencement.
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