Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2004-2005-2006
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
INTELLECTUAL PROPERTY LAWS AMENDMENT BILL 2006
FURTHER EXPLANATORY MEMORANDUM
(Circulated by authority of
the Parliamentary Secretary to the Minister for Industry, Tourism and Resources,
the Hon Bob Baldwin MP)
INTELLECTUAL PROPERTY LAWS AMENDMENT BILL 2006
Outline
This explanatory memorandum (EM) is a further EM to the one presented to the
House of Representatives on 30 March 2006.
It has been prepared in response to the report of the Senate Economics Legislation
Committee (the Committee) into the provisions of the Intellectual Property Laws
Amendment Bill 2006 (the Bill), which was tabled in the Senate on 17 August 2006.
The Committee recommended that:
"the Government reconsider Schedule 8 of the Bill in the light of the
concerns raised by Professor Corones and Mr Clapperton, in order to
clarify the relationship between the patent licensing provisions of the
Bill and the Trade Practices Act."
After reconsidering Schedule 8 to the Bill in the light of these concerns (which are
reproduced in the Committee's report), and after consultation with Professor Corones,
this further EM has been prepared in order to clarify the relationship between these
provisions.
The following pages are intended to replace pages 44 and 45 of the original EM.
Paragraphs 173 and 174 more clearly set out the relationship between these
provisions.
1. an apparatus or method specifically designed for manufacturing or testing a
particular pharmaceutical substance.
160. The reference in subparagraph 119A(3)(b)(i) and (ii) to `raw materials' is intended to cover
all materials and substances required for production of the good. The reference in
subparagraph 119A(3)(b)(iii) to `pro-drug' is intended to cover pro-drugs that metabolise into
pro-drugs, as well as pro-drugs that metabolise into pharmaceutical substances. The reference to
`metabolite' is intended to cover anything into which a metabolite is subsequently metabolised.
Item 4
161. Item 4 is an application provision.
162. According to this item, the amendments made by this Schedule will apply to any patents
that are in force at or after the time that the Schedule commences. This is intended to cover all
patents applied for and granted before commencement, as well as to patents applied for and
granted after commencement.
163. It is also intended to cover patents that have ceased prior to commencement and which are
restored after commencement.
164. The Schedule applies only to the exploitation of any patents as described in the previous
paragraphs that occurs at or after the time that the Schedule commences. Subsection 78(2) as
enacted immediately prior to commencement of this Schedule will continue to apply to any
exploitation of patents that occurred prior to commencement.
Schedule 8--Compulsory licensing of patents
Patents Act 1990
165. Schedule 8 implements the Government's response to a recommendation from the IPCR
Committee's Review of Intellectual Property Legislation under the Competition Principles
Agreement.
166. The IPCR Committee recommended that section 135 of the Patents Act be repealed and
that subsection 133(2) be amended to include an order requiring a compulsory license to be
made if and only if all of the following conditions are met:
(a) access to the patented invention is required for competition in the (relevant) market;
(b) there is a public interest in enhanced competition in that market;
(c) reasonable requirements for such access have not been met;
(d) the order will have the effect of allowing these reasonable requirements to be better
met; and
(e) the order will not compromise the legitimate interests of the patent owner, including
that owner's right to share in the return society obtains from the owner's invention,
and to benefit from any successive invention, made within the patent term, that relies
on the patent.
160. The IPCR Committee considered that the test for a compulsory licence should be stringent,
and that a licence should only be granted if there is no other option for competition in the
relevant market than by having access to the patented invention. It also considered that the
enhancement of competition in the relevant market that would be secured by grant of the
compulsory licence would have to be material and substantial.
161. The Government accepted this recommendation in part, agreeing to make the compulsory
licensing of patents subject to a competition test. However, the Government did not accept that a
competition test should be the only test for compulsory licences. Instead, the Government agreed
44
to retain the existing test for compulsory licences, but to add a competition test as an additional
ground on which a compulsory licence can be obtained. The Government also considered that all
applications for compulsory licences should be considered by the Federal Court in the first
instance.
162. The IPCR Committee did not seek to draft the conditions that would need to be met for the
grant of a compulsory licence. Rather than introducing a new competition-based test into the
Patents Act, the Government considers that a compulsory licence should be obtainable as a
remedy if the patentee is acting anti-competitively in contravention of Part IV of the Trade
Practices Act 1974.
Item 1
163. Item 1 omits the reference in subsection 133(1) to `a prescribed court' (defined in Schedule
1 to the Patents Act as including the Federal Court and State and Territory Supreme Courts), and
replaces it with a reference to the Federal Court.
Item 2
164. This item repeals paragraphs 133(2)(a) and (b), and substitutes new paragraphs 133(2)(a)
and (b). The original paragraphs 133(2)(a) and (b) set out the two limbs of the existing test for
grant of compulsory licences for patents; the `reasonable requirements of the public' test and if
the patentee has given no satisfactory reason for failing to exploit the invention. The `reasonable
requirements of the public' are set out in section 135 of the Patents Act. New
subparagraph 133(2)(a)(i) reflects the former subsection 133(3A), which is repealed by item 3.
165. Paragraph 133(2)(b) represents the additional competition test for compulsory licences.
Under this test, if the patentee has contravened or is contravening Part IV of the Trade Practices
Act or an application law (as defined in section 150A of the Trade Practices Act) in connection
with a patent, then a compulsory licence is available as a remedy for that contravention. The
Trade Practices Act is part of a national scheme of legislation restricting anti-competitive
conduct. An `application law' (as defined in section 150A of the Trade Practices Act) refers to
the various State and Territory Competition Policy Reform Acts that are the State and Territory
enactments comprising this national scheme.
166. In NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 90 at 120-
121 [85] the High Court of Australia indicated that, if an intellectual property owner refuses to
licence intellectual property, or only licenses it on particular conditions, section 46 of the Trade
Practices Act can be attracted, and used to create access regimes. However, the Trade Practices
Act does not include a specific provision under which a person can directly apply to the court for
a compulsory licence of a patent.
167. This provision to be inserted into the Patents Act is intended to complement the remedies
available under the Trade Practices Act, and is not intended to limit the court's powers under the
Trade Practices Act. It is intended to clarify that a compulsory licence for a patent is available as
a remedy under the Patents Act for any breach of Part IV of the Trade Practices Act. This is in
addition to any other remedies that may be available under the Trade Practices Act.
Item 3
168. Item 3 repeals subsection 133(3A). The text that was formerly in this subsection has been
inserted into subparagraph 133(2)(a)(i) (see item 2).
Item 4
169. Item 4 omits the reference in paragraph 133(5)(b) to `a prescribed court', and replaces it
with a reference to the Federal Court.
45
Index]
[Search]
[Download]
[Bill]
[Help]