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Monday, May 2, 2016

Dramatic IP changes may be in the pipeline with Draft PC Report

By Suzy Roessel, Senior Associate

The Productivity Commission has released a Draft Report on Intellectual Property arrangements in Australia, which may mean drastic changes to the law are coming. Released on Friday, the Draft Report is open for comment by written submission until 3 June 2016, with a final report to be provided to the Australian Government in August this year and published shortly thereafter. The Draft Report follows last year's issues paper and contains 23 draft recommendations, along with a number of draft findings and requests for further information.

The holistic and principled approach of the Productivity Commission is commendable. It is desirable to avoid 'spot fire' legislation adopted quickly to address a particular issue without proper consideration of compatibility with other aspects of the legislation and affected stakeholders.

A weakness of the Draft Report is that the Commission consists of economists and there are, perhaps not surprisingly, gaps in the legal and practical analysis.

The Draft Report proposes a major re-balancing of copyright between copyright owners and consumers and intermediate users through the reduction of geographical barriers and more flexible defences to copyright infringement, including replacing the fair dealing defences with a flexible fair use defence. Many of these changes reflect previous reviews and will be welcomed by consumers but will be controversial with copyright owners.

Please get in touch with our team if you'd like to work with us to prepare a submission on the Draft Report.

The Draft Report also makes recommendations to 'raise the quality of patents' (including raising the bar for inventive step, abolishing innovation patents and excluding business methods and software from patentable subject matter), raise patent renewal fees, and take measures to ensure that commercial IP transactions are subject to competition law.

The recommendation to further change the patent law follows extensive changes made after careful review by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). These changes, which raised the bar for patent applicants, have not yet flowed through the system and it is not known if they have now achieved the right balance. The proposed technology-specific legislation on business methods and software is likely to fall foul of international treaties. Increased fees will be controversial and arguably unfair to small and medium businesses. The position regarding the overlap of competition and IP provisions is highly controversial.

Summary of the draft recommendations

  • The Australian Government should take a principled approach to formulating intellectual property policy, having regarding to principles of effectiveness, efficiency, adaptability and accountability.


  • Current terms of copyright protection should apply to unpublished works.
  • It should not be an infringement for consumers to circumvent geoblocking technology.
  • Parallel importations restrictions for books should be repealed.
  • The fair dealing exceptions to copyright infringement should be replaced by a broad exception for fair use (see also our recent post on the US Google Books decision on this issue).
  • Another interesting observation is the Draft Finding (rather than a recommendation) that a 'more reasonable' copyright term would be closer to 15 to 25 years from creation rather than the current term of 70 years after death. The Draft Report rightly acknowledges that Australia has no unilateral capacity to alter the copyright term, and alternatively suggests that future negotiations at the international level should push for a reduction of the copyright term. 


  • Sections 7(2) and 7(3) should be amended to further raise the obviousness threshold to at least the highest level applied in larger markets for technology. This recommendation refers to the EPO Board of Appeal test, which is stated in the Draft Report as 'whether a course of action required to arrive at the invention or solution to the problem would have been obvious for a person skilled in the art to try with a reasonable expectation of success'. 
  • The Patents Act 1990 (Cth) should be amended to include an objects clause, to describe the purposes of the legislation as being to enhance the wellbeing of Australians by providing patent protection to socially valuable innovations that would not have otherwise occurred and by promoting the dissemination of technology.
  • The Australian Government should consider using higher and more pronounced renewal fees later in the life of a standard patent.
  • The innovation patent system should be abolished.
  • Business methods and software should be specifically excluded from patentable subject matter (s 18). 
  • Patent term extensions should be calculated based on the time taken for regulatory approval over and above one year (s 77).
  • Extensions of patent term in Australia should only be granted through a tailored system which explicitly allows for manufacture for export in the extension period. 
  • There should be no extension of the period of data protection, including that applicable to biologics. Australia should negotiate toward a system of eventual publication of clinical trial data in exchange for statutory data protection.
  • There should be a transparent reporting and monitoring system administered by the ACCC to detect pay-for-delay settlements between originators and generic pharmaceutical companies.
  • Data collection requirements for applications for an extension of term under s 76A should be improved. 


  • Australia should not join the Hague Agreement until an evidence-based case is made, informed by a cost–benefit analysis.

Trade marks and geographical indicators

  • Improve the effectiveness of the trade mark system by:
    • restoring the trade mark examiner's power to apply mandatory disclaimers to trade mark applications (see ACIP recommendation 5 on IP 2004);
    • repealing Part 17 of the Trade Marks Act 1995 (Cth) (defensive trade marks);
    • amending s 43 of the Trade Marks Act so that presumption of registrability does not apply to potentially misleading or confusing marks;
    • amending the schedule of fees so that higher fees apply for marks that register in multiple classes and / or entire classes of goods and services;
    • requiring the Trade Marks Office to return to its previous practice of routinely challenging applications for marks that contain contemporary geographical references under s 43 of the Trade Marks Act; and 
    • linking the ATMOSS system to the ASIC business registration portal, including to warn of a registration that may infringe an existing mark and to allow for searches of disclaimers and endorsements.
  • Amend s 123 of the Trade Marks Act (possibly modelled on s 97A of the New Zealand Trade Marks Act) to ensure that parallel imports of marked goods do not infringe Australian registered trade marks provided that the relevant good has been brought to market elsewhere by the owner or licensee of the mark.

Plant Breeder's Rights

Competition policy, IP and public institutions, compliance and enforcement

  • Repeal s 51(3) of the Competition and Consumer Act 2010 (Cth). This section exempts licensing or assignment of IP from certain competition provisions of the CCA.
  • All Australian, and State and Territory Governments should implement an open access policy for publicly-funded research, providing free access for all government-funded publications within 12 months of publication with minimal exemptions. 
  • Australia should revive its role in supporting opportunities to promote global cooperation on intellectual property policy among intellectual property offices through WIPO and the WTO to avoid duplication and reduce transaction costs. 
  • Expand the safe harbour scheme (see Copyright Act 1968 (Cth) Div 2AA) to cover the broader set of online ISPs intended in the Copyright Act

1 comment:

  1. Dear Suzy thank you for aware us about the changes that your government is going to make.