Posts Tagged ‘compulsory licence’

Intellectual Property Laws Amendment Bill 2014

Thursday, March 20th, 2014

After the consultation, the Intellectual Property Laws Amendment Bill 2014 has been introduced.

  • Schedules 1 and 2 aim to implement the TRIPS Protocol:

    According to the EM:

    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.

    Schedule 1 introduces provisions to implement the “interim waiver” agreed in the Doha Declaration 2001; Schedule 2 implements the TRIPS Protocol regime agreed in 2003 (or, I think, 2005).

    According to the EM, only one licence has been issued under these regimes – Canada in 2007. Apparently, Canadian generics would like to engage in further licensing, but the procedures are too complicated. Also, Least Developed Countries do not need to provide patent protection until 2016 and there is said to be a lack of awareness of the regime.[1]

  • Schedule 3 confers jurisdiction over plant breeder’s rights matters on the Federal Circuit Court (in addition to the Federal Court)
  • Schedule 4:
    • introduces the “single examination” model for patent applications in Australia and New Zealand;[2]
    • the single regulatory regime for patent attorneys and trade mark attorneys in both countries – the so-called trans-Tasman regulatory regime; and
    • provides for a single address for service in either Australia or New Zealand to be used under the patents, trade marks, registered designs and plant breeder’s rights legislation.
  • Schedule 5 is headed “Technical Amendments” which include repealing “unnecessary document retention provisions” and addressing “minor oversights in the drafting of” the Raising the Bar Act. These include:
    • amending s 29A so that an international applicant under the PCT cannot require anything to be done in Australia until the application enters the national phase;
    • amending s 29B so that only the prescribed period under s 38(1A) applies to Paris Convention applications;
    • amending ss 41 and 43 in relation to disclosure requirements for micro-organism inventions
    • amending s 43 to permit reference to the combination of prescribed documents, not just to individual prescribed documents alone
    • the defence in s 119(3)(b) will be amended to bring it into line with the amended form of s 24(1)(a)
    • amending s 191A so that the requirement for the Commissioner to hear both parties prescribed in s 191A(4) applies only in entitlement disputes.

Intellectual Property Laws Amendment Bill 2014

Explanatory memorandum


  1. The Regulatory Impact Statement included in the EM estimates that 63 in-house legal professionals and 128 patent attorneys in external firms will need to familiarise themselves with these changes for a total start up cost to business of $13,782.60 and an ongoing annual cost of $105. These costs include allowance for savings in legal costs because it will be possible to bring proceedings for infringement of plant breeder’s rights in the Federal Circuit Court, rather than the Federal Court. Perhaps confusing costs with earnings, the Regulatory Impact Statement relies on the ABS Employee Earnings and Hours Survey to estimate the average cost of patent and trade mark attorneys as $50 per hour (junior solicitors $60 per hour, IP attorneys $74.10 per hour and barristers $92.70 per hour, after including a 50% loading for overheads). The Statement does recognise that charge out rates “for lega”for legal professionals can range from $120 per hour to $800 per hour or more, viewed on 4 December 2013 at http://www.legallawyers.com.au/legal-topics/law-firm-sydney/solicitor-prices/. These costs do not reflect the opportunity cost of labour.” You may also be interested to know that the Regulatory Impact Statement estimates the costs of an application to the Federal Court for a licence at around $21,650 for the applicant.  ?
  2. The substance of the two countries’ respective patent laws is not being harmonised (yet).  ?
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Productivity Commission on Compulsory Licensing: Draft Report

Wednesday, December 19th, 2012

The Productivity Commission has released its draft Report on Compulsory Licensing of  Patents.

There are 10 chapters and 4 appendices.

The main (draft) recommendations at this stage are the repeal of s 133(2)(b), 135 and 136 of the Patents Act. The Productivity Commission also in substance renews the call to repeal s 51(3) of the Competition and Consumer Act.

The primary object to these recommendations is to make the avenue for relief against the restrictive trade practices (antitrust conduct) of a patentee the Competition and Consumer Act 2010 (Cth). The Productivity Commission also recommends that the Competition and Consumer Act 2010 be amended “to explicitly recognise compulsory licensing of a patent as a remedy under that Act.

The Productivity Commission considers that the current requirements under s 135 requiring demonstration that the reasonable requirements of the public are not being met and consideration of the interests of Australian industry to be inconsistent with promoting community-wide welfare.

In its place, the Productivity Commission proposes that a new test be introduced into the Competition and Consumer Act making a compulsory licence available where:

(a) Australian demand for a product or service is not being met on reasonable terms, and access to the patented invention is essential for meeting this demand.

(b) The applicant has tried for a reasonable period, but without success, to obtain access from the patentee on reasonable terms and conditions.

(c) There is a public interest in providing access to the applicant, having regard to:

• costs to the patentee from granting access to the patented invention

• benefits to consumers and the licensee from the licensee’s access to the invention

• longer-term impacts on community wellbeing.

(d) The terms of any compulsory licence order are consistent with public interest, having regard to:

• the right of the patentee to obtain a return on investment commensurate with the regulatory and commercial risks involved

• the right of the public to the efficient exploitation of the invention.

Bearing in mind that there have been very few private actions based on the antitrust or restrictive trade practices provisions and even fewer successful actions (and, for that matter, very few, if any, applications for a compulsory licence under the Patents Act), this new test plainly has the potential to significantly change the nature of a patentee’s rights. That could be very well affected by the interpretation applied to “being met on reasonable terms” in para (a) and “long term impact on community wellbeing” in para (c) and the extent, if any, that the proposed test is applied based on incentives to innovate before the invention is made (ex ante) or after the invention has already been made (ex post).

A change in this balance would appear to be intended as the Productivity Commission is concerned that the existing competition test in s 133 of the Patents Act is triggered only by anti-competitive behaviour where what is needed, according to the Productivity Commission, is a test based on enhancing competition.

If you wish to make a submission, it should be submitted by 8 February 2013 as the Final Report is due to be submitted to Government by 29 March 2013.

So far, there have been 35 submissions.

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Intellectual Property Laws Amendment Bill 2012 – exposure draft

Saturday, August 18th, 2012

IP Australia has released for public comment an exposure draft of the proposed Intellectual Property Laws Amendment Bill 2012. The Bill has 2 purposes:

  1. to amend the Patents Act 1990 in light of the DOHA Declaration / TRIPS Protocol; and
  2. to confer original jurisdiction in matters arising under the Plant Breeder’s Rights Act 1994 on the Federal Magistrates Court in addition to the Federal Court’s existing jurisdiction.

DOHA Declaration[1] / TRIPS Protocol

Article 31 (scroll down) of the TRIPS Agreement permits members of the WTO to permit the use of patented inventions without the permission of the rightholder in the circumstances set out in the article.

The HIV/Aids crisis in Africa revealed a problem in this regime in that a number of countries which needed to rely on these provisions did not have the infrastructure, or were otherwise unable effectively, to take advantage of this regime. The basic idea underlying, first, the DOHA Declaration and, then, the TRIPS Protocol is to enable such countries to take advantage of the facilities and expertise in other countries by having the relevant drug made under compulsory licence in the foreign country.

So far, only Canada has notified the WTO pursuant to the DOHA Declaration that it has granted a compulsory licence to Apotex to export TriAvir[2] to Rwanda.[3]

Following on from consultations begun in 2010, the Government announced its intention to amend the Patents Act to implement the DOHA regime in March last year. The object of the proposed amendments is to introduce a regime for the grant of compulsory licences of pharmaceutical products on public health grounds for export to least-developed or developing countries (to be defined in the Bill as “eligible importing countries”).
As the TRIPS Protocol is not yet in force,[4] schedule 1 of the Bill is intended to implement the interim regime adopted under the DOHA Declaration. When the TRIPS Protocol does come into force, the regime in schedule 1 will be superseded by the regime to be enacted by schedule 2 of the Bill.

In either case, the regime will be separate from, and independent of, the existing compulsory licensing regime relating to domestic non-use which is currently the subject of a reference to the Productivity Commission.

As with the existing “non-use” regime, any compulsory licences would be granted only on application to the Federal Court, and not the Commissioner of Patents. If the patents in question are innovation patents, it would be necessary to apply for certification (where that has not occurred already).

Federal Magistrates Court

The extension of jurisdiction over PBR matters to the Federal Magistrates Court, which “is designed to deal with less complex matters more quickly and informally than the Federal Court”, follows several years experience with copyright matters and the extension of jurisdiction over patent, trade mark and registered design matters enacted by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012, which comes into effect on 15 April 2013.

Onus in trade mark oppositions

I wonder why the bill doesn’t fix up the onus for oppositions to the registration of trade marks to the “balance of probabilities” standard in line with the amendments – see Part 2 – that will apply in patent oppositions from 1 April 2013?

Submissions should be made by 1 October 2012.

Intellectual Property Laws Amendment Bill 2012 – exposure draft

Exposure draft Explanatory Memorandum

IP Australia’s Home Page for the exposure draft process.


  1. This is not strictly accurate terminology: I am using it as shorthand to refer to the WTO Council decision in December 2003 on paragraph 6 of the DOHA Declaration made in 2001. The WTO’s overview page is here.  ?
  2. A fixed-dose combination product of Zidovudine, Lamivudine and Nevirapine, according to Rwanda’s notification: see View Notifications.  ?
  3. The compulsory licence was issued by the Commissioner of Patents on 19 September 2007 for a period of 2 years: click on View notifications.  ?
  4. Australia has already accepted the TRIPS Protocol, but it does not come into force until two thirds of WTO’s 155 members accept it. If one counts the EU as “one” member – not sure on the politics of this as there are currently 27 members of the EU, as at May this year 44 members had accepted the TRIPS Protocol.  ?
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Compulsory licensing of patents

Wednesday, July 18th, 2012

The Assistant Treasurer has referred the operation of the compulsory licence regime within the Patents Act 1990 to the Productivity Commission for review.

At present, sections 133 to 140 of the Patents Act provide for applications to be made to the Federal Court for a compulsory licence to work a patent where

(i) the applicant has tried for a reasonable period, but without success, to obtain from the patentee an authorisation to work the invention on reasonable terms and conditions;

>(ii) the reasonable requirements of the public with respect to the patented invention have not been satisfied;

(iii) the patentee has given no satisfactory reason for failing to exploit the patent; or

the patentee has contravened the anti-competitive provisions in Part IV of the Competition and Consumer Act 2010.

The Terms of Reference require the Productivity Commission to:

  1. Assess whether the current Australian provisions can be invoked efficiently and effectively to deal with circumstances where reasonable requirements of the public are not being met or where the patentee engages in anti-competitive conduct. This includes, but is not limited to, consideration of concerns that gene patents may hinder access to affordable healthcare, including access to medical advice that relies on the identification and use of gene sequences related to human health and disease.
  2. Advise on the frequency, and impact, of the issue of compulsory licences in comparable markets and the common features in such compulsory licenses.
  3. Recommend any measures that may be required to efficiently and effectively exercise these safeguard provisions and invoke their use in a manner consistent with Australia’s international obligations, without limiting access to overseas technologies, technology transfer, research and development investments or substantially reducing the patent incentive for innovation.
  4. Recommend any alternative mechanisms deemed necessary to ensure that the balance between incentives to innovate and access to technology best reflect objectives of ensuring reasonable access to health care solutions, maximising economic growth and growing the Australian manufacturing industry.
  5. Recommend measures to raise awareness of these provisions and their purpose, including the specific challenges of raising awareness among small businesses and the healthcare sector.

The genesis of the reference seems to lie in the uproar resulting from the attempt to charge licence fees for diagnostic kits based on the BRCA 1 patent and, more recently, the smartphone wars.[1]

A number of submissions to the Senate’s Community Affairs committee claimed that there were a range of deficiencies with the present scheme. In addition, IP Australia told the Senate’s Community Affairs committee when it was investigating these (and other matters) that, in the 100+ years our law has had such provision, there had been only 3 applications for the grant of a compulsory licence. The ALRC had also recommended that the scope of ‘reasonable requirements of the public’ be clarified (the recommendation to make the competition test a basis for licensing having been sort of implemented when s 133(2)(b) was inserted in 2006.

The Terms of Reference also note that Australia is a net importer of technology with, for example, only 1,178 (or 8%) of the 14,557 patents granted in 2010 being granted to Australian residents.

The TRIPS Agreement allows us to do something in this sphere. See art. 40 and art. 27.2 even goes so far as to allow us to exclude from patentability things necessary to protect ordre public “including to protect human … life or health”.

Of course, the multi-million dollar question in all of this is what that elastic word “reasonable” might mean?

Do also note paragraph 4 of art. 40, which gives a country that is concerned its nationals are being prejudiced by the exercise of such rights an “opportunity for consultations”. Of course, such a country might just move straight to the dispute resolution processes. I wonder how a more liberal use of compulsory licensing, or the threat of it, would play with those of our trading partners who consider compulsory licences of patents to be anathema?

According to the Productivity Commission’s website:

1 an issues paper will be released in August;
2 initial submissions will be due by 28 September;
3 there will be a draft report released in early December;
4 public hearings will be held in February 2013; and
5 the final report will be delivered to the government on 29 March 2013.


  1. According to the Press Release amongst other things: “Of concern to government is a perception that patents over genetic technologies, or a perceived lack of licences to use these patents in Australia, unreasonably restricts or delays patient access to medical advice based on the latest diagnostic tests. Other areas of sensitivity include climate change mitigation, food security and alternative energy technologies, and technical standards essential patents (for example, in telecommunication technologies).”  ?
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PPCA v Commonwealth

Friday, March 30th, 2012

The High Court has rejected the constitutional challenge to the validity of the “1%” cap on licence fees payable by broadcasters to the record companies on very narrow and specific grounds.

Section 109 of the Copyright Act 1968 provides a compulsory licence for the broadcasting to the public of sound recordings. Section 152, however, caps the royalty payable to record companies by broadcasters at 1% of the gross earnings of the broadcaster.

No such limitation had applied to the “corresponding” copyright in sound recordings under the 1911 Act.

The 1911 Act was repealed when the 1968 Act came into force on 1 July 1969. Section 220 of the 1968 Act provided that sound recordings in which copyright subsisted immediately before 1 July 1969 qualified for copyright under the 1969 Act effectively as provided for under the 1968 Act.

The record companies argued that the imposition of the 1% cap was an acquisition of their property in sound recordings made before July 1969 otherwise than on just terms in contravention of s 51(xxxi) of the Constitution.

The High Court has unanimously rejected that claim.

French CJ, Gummow, Hayne and Bell J said the record companies’ argument was predicated on a wrong assumption. They no longer owned copyright under the 1911 Act which had been qualified. Rather that copyright had been terminated and replaced with a new and different copyright under the 1968 Act. So at [10] and [11]:

[10] The assumption by the plaintiffs is that the copyright presently enjoyed in respect of the pre?1969 recordings, and which will expire in accordance with the extended term fixed by the operation of the Free Trade Act upon the 1968 Act, is that which arose under the 1911 Act and was carried forward by the 1968 Act, but with the impermissible imposition upon those copyrights of the “cap” in the compulsory licensing system introduced by the 1968 Act. The Commonwealth denies that assumption. The Commonwealth submission, which should be accepted, is that upon the proper construction of the 1968 Act: (a) copyrights subsisting in Australia on 1 May 1969 under the Imperial system were terminated; (b) thereafter, no copyright subsisted otherwise than by virtue of the 1968 Act; and (c) to that copyright in respect of sound recordings there attached immediately the compulsory licensing system including the “cap” upon the royalties payable thereunder.

[11] It should be emphasised that the plaintiffs do not assert that the 1968 Act is invalid by reason of its bringing to an end the operation in Australia of the Imperial system without the provision of just terms. To do so successfully would be to leave them with such rights in respect of the pre?1969 recordings as they had under the 1911 Act and the 1912 Act, and without any copyrights subsisting under the 1968 Act. Rather, the plaintiffs seek to attack the validity of the attachment to their rights under the 1968 Act of one aspect of the compulsory licensing system for sound recordings. For the reasons which follow, that attack must fail.

Heydon J to similar effect at [63]:

In short, the 1968 Act did not preserve the second to sixth plaintiffs’ rights under the 1911 Act and the 1912 Act. It abolished those rights. It substituted for them distinct and fresh rights – some more advantageous to those plaintiffs, some less. Thus ss 109 and 152 did not cause any property to be acquired. Property may have been extinguished by other provisions, but the plaintiffs’ case was not concerned with them.

After considering the application of s 51(xxxi) of the Constitution to statutory intellectual property rights generally, Crennan and Kiefel JJ reached the same conclusion at [129], pointing out at [130] that the record companies could not accept s 220 of the Copyright Act as valid and at the same time contend that ss 109 and 152 were invalid.

[129] When ss 8, 31, 85, 89(1), 207 and 220(1) of the 1968 Act are read together, it is clear that the copyright of the relevant plaintiffs under the 1911 Act, which included the exclusive right to perform the record in public, is not continued under the 1968 Act; rather it is replaced. Whilst it is true that, as the plaintiffs submit, certain records in which copyright subsisted under the 1911 Act are brought within the scheme of the 1968 Act, that is achieved by the re enactment, in substance, of qualifying provisions in the 1911 Act in, and for the purposes of, the 1968 Act. The effect is that the plaintiffs’ entitlement to sue for infringements under s 101 of the 1968 Act in respect of sound recordings in which copyright subsists pursuant to s 89(1) is an entitlement to sue in respect of infringements of the copyright in sound recordings contained in s 85, which replaces the copyright in records under s 19(1) of the 1911 Act. Inasmuch as ss 109 and 152 operate to qualify a record manufacturer’s exclusive rights by providing an exception to infringement, it is the exclusive rights under s 85 which are affected, not the exclusive rights under the 1911 Act (which have been replaced).

[130] Whilst the plaintiffs mount no attack on the validity of provisions of the 1968 Act which effect the replacement of the relevant plaintiffs’ copyright under the 1911 Act with a copyright under the 1968 Act, their attack on the validity of ss 109 and 152, which depends on the continuing subsistence of copyright under s 19(1) of the 1911 Act, is untenable. If the plaintiffs were to attack the validity of the provisions of the 1968 Act which effect the replacement of copyright under s 19(1) of the 1911 Act with a differently constituted copyright under s 85 of the 1968 Act, they would risk being left not only with the awkwardly expressed copyright under s 19(1) of the 1911 Act in respect of records, but also with a copyright, the term of which was limited to 50, rather than 70, years.

Now the High Court have reminded themselves of all these matters, they will be primed for the tobacco companies challenge to the validity of the Tobacco Plain Packaging Act 2011, the hearings for which start in April.

Phonographic Performance Company of Australia Limited v Commonwealth of Australia [2012] HCA 8

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Compulsory licences for patented medicines

Thursday, March 24th, 2011

The Australian government has announced its intention to amend the Patents Act by the end of 2011 to empower the Federal Court to grant “to manufacture and export patented pharmaceuticals to countries trying to deal with epidemics and other types of health crises.”

This announcement appears to implement the DOHA declaration (in 2001) on the compatability of TRIPS and public health issues particularly in developing countries.

Press announcement here. WHO on DOHA here and here (pdf). DOHA itself, Chairman’s statement and notifications (only Canada has made it on to the list as an exporting country, so far) and the 2005 amendment Protocol (of which, so far, only 34 members have notified acceptance (68 to go)).

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