Draft IP Bill Released as Part 2 of Response to the Productivity Commission Inquiry

Tuesday 27 November 2018 @ 12.08 p.m. | IP & Media | Legal Research

The exposure draft for the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2018 (CTH) (‘the Bill’) was released for public consultation from 23 July to 31 August 2018. The Bill is yet to be introduced to Parliament.

The Bill was drafted following the passage of the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (CTH) (‘the Act’), and is the second set of legislative amendments in response to the 2016 Productivity Commission’s Inquiry into Australia’s Intellectual Property Arrangements (‘the Inquiry’). The Inquiry and the Act has been discussed in a previous TimeBase article.

The Draft Bill

The Bill will be amending the Patents Act 1990 (CTH) (‘the Patents Act’), Designs Act 2003 (CTH) and Trade Marks Act 1995 (CTH) (‘the Trade Marks Act’). Generally, the amendments are in regards to recommendations from the Inquiry, Crown use of patents and designs, compulsory licenses, seals, specifications and protection of information.

In the Schedule 1, the Bill will be giving effect to three recommendations from the Inquiry, these are:

  1. Amendment of the inventive step requirement in a standard patent (recommendation 7.2)
  2. Introduction of an objects clause in the Patents Act  (recommendation 7.1)
  3. Abolishing the innovation patent system (recommendation 8.1)

One of the main concerns noted in the Inquiry was that Australia’s threshold for the inventive step was comparatively lower than other countries. This step was recommended to be at minimum, able to meet the highest threshold set any country that Australia conducted substantial technology trade with. In increasing this threshold, the overall environment for innovation in Australia is predicted to increase, and in turn leading to a more productive economy.

In Schedules 2 and 3, the Bill amends the Crown use of patents and designs, the explanatory notes elaborate, specifically in regards to Crown use of patents:

“Crown use permits governments to exploit a patented invention without authorisation by the patentee, where exploitation of the invention is necessary for the proper provision of services of the Commonwealth or a State. Crown use provisions provide a rarely-used 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. … 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.”

However, the Inquiry noted that lack of certainty and transparency has raised concerns, in response, the Bill proposes that:

  1. Crown use only be used for a service that is primarily provided or funded by a Commonwealth, State or Territory Government
  2. Governments will first seek a negotiated outcome with the patent owner (rather than remuneration after the fact, as it is currently)

In Schedule 4, the Bill amends compulsory licensing of patents. The explanatory notes explain:

“These safeguards can be invoked in exceptional circumstances where exercising the exclusive rights associated with a patent would not serve the best interests of the community. … A compulsory licence is an order made by the Federal Court for a patentee to grant a licence to another party to exploit an invention. Compulsory licensing provides a mechanism to prevent the patentee from restricting others from exploiting the invention in the local market, where it has failed to do so itself.”

Under current law, the test for a compulsory license is the ‘reasonable requirements of the public’ threshold; this is proposed to be amended with a ‘public interest’ test. This amendment is proposed as under the current test, there is potential to conflate this threshold with the interests of the Australian industry inconsistent with the promotion of the community’s welfare.

Finally, Schedules 5, 6 and 7 of the Bill proposes technical fixes to the Patents Act and the Trade Marks Act in regards to seals, specifications and protection of information. The explanatory notes summarises these amendments:

“Collectively, the measures in these schedules are proposed to address a small number of errors and inconsistencies in the IP legislation, and to improve the way IP Australia is able to deliver service to its customers by reducing the time both customers and IP Australia need to spend on administrative matters.”

Schedule 5 will amend the Patents Act and the Trade Marks Act to allow for supply of electronic certified copies of documents. Currently, paper copies are required under these Acts.

Schedule 6 will correct a drafting oversight to abolish omnibus claims.

Schedule 7 will improve on privacy concerns in regards to the Commissioner of Patents. Patent applications and documents are published and made public for public benefit. However, there may be sensitive commercial or personal information in these applications non-essential to the understanding of the invention, and therefore inappropriate for publication. Currently the Commissioner of Patents has powers under the Patents Regulations 1991 (CTH) to not publish certain documents. These amendments will provide further clarify to these powers and will allow the Commissioner to partially redact information from a document and publish a redacted version.

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products. Nothing on this website should be construed as legal advice and does not substitute for the advice of competent legal counsel.


The Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2018 (CTH) and supporting materials, available from TimeBase's LawOne service.

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