A Productivity Commission Inquiry into Compulsory Licensing of Patents has released a Report recommending that the overlap that exists with the Competition and Consumer Act be removed from the Patents Act and that the “reasonable requirement of public” test be replaced with a new “public interest” test.
The Productivity Commission Inquiry Report into Compulsory Licensing of Patents was released on 27 May 2013. The purpose of the inquiry was to assess the impacts and mechanisms of the Patent Act’s compulsory licensing safeguard. The Productivity Commission also considered the Crown use provisions, which have been adopted in the Intellectual Property Laws Amendment Bill 2013 that was introduced into Parliament on 30 May 2013. Refer to our related article - Proposed changes to Crown use in Australia.
Under the Patents Act 1990 patent owners can be compelled to license their patent in a limited range of circumstances under Section 133. The Federal Court may make an order if satisfied that:
Under Section 135, the reasonable requirements of the public are to be taken not to have been satisfied if:
No compulsory licenses have ever been granted in Australia; this may be due to it being a rarely needed safeguard or because it involves a costly and time consuming process with the Federal Court. Whilst the Productivity Commission considered alternatives, they concluded that there were none that would be significantly less costly and time consuming without also reducing the quality of the outcomes and increasing the scope for appeals.
Anticompetitive behaviour overlap
Finding: There is an unnecessary overlap between the Competition and Consumer Act 2010 (Cwlth) and the Patents Act 1990 (Cwlth) in relation to anticompetitive behaviour.
Recommendation: deletion of s133(2)(b) from the Patents Act – such that one must rely on the Competition and Consumer Act for a compulsory licence order based on restrictive trade practices of a patent holder.
Replacement of reasonable requirements test
Finding: The current language in Section 135 of the Patents Act regarding “reasonable requirements of the public” does not necessarily focus on the interests of the community as a whole.
Recommendations: replace “reasonable requirement of public” test with a new public interest test, which should specify that a compulsory licence would be available if the following conditions are met:
The Productivity Commission also recommended that the “new provisions should require the Federal Court to set the terms of the licence, including – where the parties cannot reach agreement – any remuneration, consistent with the public interest, having regard to the rights of:
The Intellectual Property Laws Amendment Bill 2013 did not incorporate these proposed amendments, however they may be considered in future law amendments.