On 18 August 2015, the then Treasurer, the Honourable Joe Hockey, and the then Minister for Small Business, the Honourable Bruce Billson, announced that the Productivity Commission will commence a broad inquiry into Australia’s intellectual property (IP) arrangements.[1]

This inquiry follows one of the recommendations of the Final Report of the Competition Policy Review (known as the “Harper Review”), which identified IP protection as a priority area for review.  In this regard, the Report recommended that the Australian Government should task the Productivity Commission to undertake an overarching review of IP in Australia.  The Review made this recommendation in view of its concern that Australia has “no overarching intellectual property policy framework or objectives guiding changes to IP protection or approaches to IP rights in the context of international trade agreements”.  The inquiry will therefore be particularly pertinent to Australia’s negotiations of the Trans-Pacific Partnership agreement currently under discussion, although that agreement is likely to be concluded before the Commission releases its final report.  

In the Terms of Reference for the inquiry, the Government has directed the Commission to:

  • examine the effect of the scope and duration of protection afforded by Australia’s IP system on research and innovation access to and cost of services and competition, trade and investment; and
  • recommend changes to the current system that would improve the overall wellbeing of Australian society, taking into account Australia’s international trade obligations.
  • In undertaking the inquiry, the Commission is to have regard to:
  • Australia's international arrangements;
  • the IP arrangements of Australia's top intellectual property trading partners and the experiences of these and other advanced economies in reforming their IP systems to ensure those systems meet the needs of the modern economy;
  • the relative contribution of imported and domestically produced IP to the Australian economy;
  • the Government's desire to retain appropriate incentives for innovation and investment;
  • the economy-wide and distributional consequences of recommendations on changes to the existing intellectual property system, including on trade and competition;
  • ensuring the IP system will be efficient, effective and robust through time, in light of economic and technological changes;
  • how proposed changes fit with, or may require changes to, other existing regulation or forms of assistance (such as research subsidies) currently providing incentives for the development of intellectual property; and
  • the findings and recommendations of the Harper Review in the context of the Australian Government's response, including recommendations related to parallel import restrictions in the Copyright Act 1968 (Cth) and the parallel importation defence under theTrade Marks Act 1995 (Cth); and
  • the findings and recommendations of the Advisory Council on Intellectual Property's Review of the Innovation Patent System, the Senate Economics References Committee's inquiry into Australia's innovation system the Australian Law Reform Commission's Copyright and the Digital Economy report.

The Commission will undertake a public consultation process, inviting submissions and releasing a draft report to the public for comment before releasing its final report.  The Commission must provide its final report to the Government by August 2016.