Intellectual Property Laws Amendment (Raising the Bar) Act 2012: Amendments relevant to infringement

Date: 2013-02-18
Author:

The following section will discuss:

  • Obtaining regulatory approval
  • Experimental use.

Obtaining regulatory approval

In brief
  • Australia’s patent law has been amended to provide that acts done solely for purposes connected with obtaining regulatory approval of a relevant product are to be exempted from patent infringement.
  • The exemption applies to acts done in relation to agrochemicals, veterinarian medicines, medical devices, diagnostics and any other non-pharmaceutical subject matter for which there is a legally established regulatory approval regime.
  • This amendment significantly broadens the narrow exemption applying pre-April 2012 that only applies to acts connected with obtaining regulatory approval of a pharmaceutical.
  • The amended law applies to acts done on or after 15 April 2012 in relation to patents granted before, on or after this time.

The infringement exemption

According to section 119B, a person may undertake an act that would otherwise be an infringement of a patent claim:

if the act is done solely for purposes connected with obtaining an approval required by a law…to exploit a product, method or process; or purposes connected with obtaining a similar approval under a law of another country or region.

Analysis

Prior to April 2012, there was no legislative provision that exempted acts done for obtaining regulatory approval of non-pharmaceutical subject matter from patent infringement. Section 119A applied (and will continue to apply) for exemption from patent infringement for those acts done solely for purposes in connection with obtaining regulatory approval of a pharmaceutical.

The concern with the pre-April 2012 law was that it put Australian manufacturers at a competitive disadvantage to those companies that have operations in other countries that allow ‘springboarding’ (ie undertaking infringing acts required for regulatory approval of a non pharmaceutical product before patent expiry), in the sense that the latter companies, in having a head start in obtaining regulatory approval, would then be able to launch products in Australia or elsewhere shortly after patent expiry and in advance of the Australian manufacturer.

The new law is not prescriptive of what acts would be considered to be exempted, although it is clear that the acts done must be in connection with a regulatory approval process required by law. This lack of prescription makes sense given that the new law is intended to cover current regulatory approval regimes, and those that may be established in the future. It also recognises that processes required under current regimes may change from time to time,
necessitating particular acts at one time that were not required at another time.

Having said this, it is clear that the exemption will not apply to acts done in respect of a regulatory approval for a pharmaceutical, nor will it apply to acts done for experimental or research purposes, as these exemptions are dealt with under section 119A and section 119C of the legislation.

The phrase ‘solely for purposes’ is intended to exclude those acts done predominantly for a commercial purpose that might otherwise occur during the process of obtaining regulatory approval, including for example, stockpiling and export of the relevant product.

Experimental use

In brief
  • Australia’s patent law has been amended to provide that acts done predominantly for the purposes of gaining new knowledge, or to test a principle or supposition regarding a patented invention are to be exempted from infringement.
  • The exemption applies irrespective of whether the person undertaking the relevant act had in mind to later commercialise, for example, an improvement arising from the act, or whether that person was aware of the patent at the time the relevant act was undertaken.
  • The amended law applies to acts done on or after 15 April 2012 in relation to patents granted before, on or after this time.

The infringement exemption for experimental use

According to section 119C, a person may undertake an act that would otherwise be an infringement of a patent claim ‘if the act is done for experimental purposes relating to the subject matter of the invention’.

‘Experimental purposes’ is non-exhaustively defined as including:

  • determining the properties of an invention
  • determining the scope of a claim relating to the invention
  • improving or modifying the invention
  • determining the validity of the patent, or of a claim relating to the invention, and
  • determining whether the patent for the invention would be, or has been infringed by the doing of an act.

Interestingly, an act that improves or modifies an invention is exempted from infringement, even if the improvement or modification is proposed for later commercialisation.

Further, section 119C requires that the experimental activities be ‘related to’ the subject matter of the invention. This achieves two outcomes:

  1. that the exemption applies to experiments that include the claimed invention, so that the person undertaking the relevant work is not required to conduct patent searches before starting an experiment, and
  2. that the exemption applies to experimentation on a patented invention, ie it does not cover experimentation using a patented invention. Importantly, it does not follow that infringement of a research tool patent is to be exempted merely because of section 119C.

Acts that remain outside the infringement exemption include those where the purpose is commercialisation. These include:

  • ‘market research’ – testing the likely commercial demand for a product, and
  • manufacture for the purpose of sale or use for commercial purposes.

Analysis

Prior to April 2012 there was no legislative provision that exempted acts done for experimental purposes relating to the subject matter of a claimed invention, and the common law that applied in the relevant circumstances was uncertain. In this context, this exemption is perhaps a welcome introduction into the Australian patent law. Having said this, the very language of the relevant provision, particularly in being inclusive with respect to the types of acts that might be within the exemption, seems unclear. We strongly recommend seeking professional advice as to whether the exemption is likely to apply in given circumstances.