Bill Introduced to Make Changes to IP Legislation Following Productivity Commission Report

Wednesday 4 April 2018 @ 10.32 a.m. | IP & Media | Legal Research | Trade & Commerce

On 28 March 2018, the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2018 (the Bill) was introduced into the House of Representatives and reached second reading stage. The Bill results from the a number of recommendations made by the Productivity Commission in its report "Intellectual Property Arrangements". The Bill was expected to include the controversial plan to phase out the "innovation patent system" as well as making other trade mark, plant breeder’s rights and technical reforms. This did not happen and it is being suggested that "...the vocal opposition to dismantling Australia’s second tier patent system may actually result in reform to support SME innovation" leading possibly to the retaining of a second tier patent in Australia.

About the Productivity Commission Report

The Productivity Commission’s final report was published in December 2016, and the Minister for Industry, Innovation and Science and the Minister for Communications announced the release of the Government’s response to the Productivity Commission’s inquiry on 25 August 2017. The report is 19 chapters and 8 appendixes long and discusses relevant background information and definitions, the broad framework applied to the inquiry, and the basis for government involvement, see Chapter 1. In chapters 2 and 3 there is an outline of the framework for assessing Australia's Intellectual Property (IP) arrangements and consideration of how the system is working overall. Specific forms of IP rights and options for reform are examined in chapters 4 - 14, while chapters 15 - 19 examine cross–cutting issues.

Some key points and recommendations made by the Productivity Commission in its report are that:

  • IP arrangements need to ensure that creators and inventors are rewarded for their efforts, but in doing so they must:
    • foster creative endeavour and investment in IP that would not otherwise occur
    • only provide the incentive needed to induce that additional investment or endeavour
    • resist impeding follow–on innovation, competition and access to goods and services.
  • Australia's patent system grants exclusivity too readily, allowing a proliferation of low quality patents,frustrating follow–on innovators and stymieing competition.
    • To raise patent quality, the Australian Government should increase the degree of invention required to receive a patent, abolish the failed innovation patent, reconfigure costly extensions of term for pharmaceutical patents, and better structure patent fees.
  • Copyright is broader in scope and longer in duration than needed - innovative firms, universities and schools, and consumers bear the cost.
    • Introducing a system of user rights, including the (well-established) principles–based fair use exception, would go some way to redress this imbalance.
  • Timely and cost effective access to copyright content is the best way to reduce infringement. The Australian Government should make it easier for users to access legitimate content by:
    • clarifying the law on geoblocking
    • repealing parallel import restrictions on books. New analysis reveals that Australian readers still pay more than those in the UK for a significant share of books.
  • Commercial transactions involving IP rights should be subject to competition law. The current exemption under the  Competition and Consumer Act is based on outdated views and should be repealed.
  • While Australia's enforcement system works relatively well, reform is needed to improve access, especially for   small– and medium–sized enterprises.
  •  Introducing (and resourcing) a specialist IP list within the Federal Circuit Court (akin to the UK model) would provide a timely and low cost option for resolving IP disputes.
  • The absence of an overarching objective, policy framework and reform champion has contributed to Australia losing   its way on IP policy.
    • Better governance arrangements are needed for a more coherent and balanced approach to IP policy development  and implementation.
  • International commitments substantially constrain Australia's IP policy flexibility.
    • The Australian Government should focus its international IP engagement on reducing transaction costs for parties using IP rights in multiple jurisdictions and encouraging more balanced policy arrangements for  patents and copyright.
  • An overdue review of TRIPS (trade-related aspects of intellectual property rights) by the WTO (World Trade     Organization) would be a helpful first step.

You can read the whole report here.

About the Bill

In introducing the Bill the Minister said in his second reading speech that: 

"The intellectual property (IP) system is an important element of the economy because it promotes and incentivises investment in creativity, innovation, research and technology."

He went on to say that the purpose of the Bill was to make improvements to IP rights legislation to better meet the objectives of promoting and incentivising investment in creativity, innovation, research and technology.

The key reforms proposed by the Bill are:

  • the repeal of Patents Act section 76A, which requires patentees to provide certain data relating to pharmaceutical patents with an extended term (Productivity Commission Recommendation Recommendation 10.1);
  • the reduction of the grace period for filing non-use applications under the Trade Marks Act (Productivity Commission Recommendation 12.1(a));
  • the clearing up of when parallel importation of trade marked goods does not infringe a registered trade mark (Productivity Commission Recommendation 12.1(c));
  • the expansion of the scope of essentially derived variety declarations in the Plant Breeder’s Rights Act (PBRA) (Productivity Commission Recommendation 13.1);
  • amendments to allow PBR exclusive licensees to take infringement actions, and for the award of additional damages under the PBR Act; and
  • streamlining of a number of processes for the handling of IP rights and some slight technical amendments (writing, filing requirements, address for services, computerised decision making).

Implementation of Remaining Productivity Commission Reforms 

The Bill does not implement all the Productivity Commissions recommendations and it is expected that there will be further legislation to come, namely: an Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2018, which is to deal with inventive step reforms, introduce an objects clause into the Patents Act 1990, make changes to Crown use, compulsory licensing of patents and designs and some further technical issues. Any remaining proposed reforms from the draft Intellectual Property Laws Amendment Bill 2017 are to follow the outcome of the first two Bills.

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