Last week, the Productivity Commission released the Issues Paper in accordance with its comprehensive review of Australia’s IP regime (Inquiry). In a previous post, we outlined the scope of the Inquiry and the key areas of the IP regime which the Federal Government had directed the Commission to examine and report on by August 2016. The Issues Paper sets out the Commission’s proposed framework for examining the IP regime and the key questions which will guide the Inquiry. The purpose of the Issues Paper is to assist individuals and organisations to prepare submissions. Submissions are due by Monday, 30 November 2015 and can be lodged in accordance with the procedure set out here.

Objective of the Inquiry

The overarching objective of the Inquiry is to assess whether Australia’s IP regime strikes the right balance between encouraging innovation and creative output without unreasonably impeding further innovation, competition and access to goods and services. As to rights which are not intended to promote innovation and creativity, such as trade marks and geographical indications, the objective of the Inquiry is to assess whether those rights adequately protect a company’s brand and reputation and avoid consumer deception, without negatively impacting on the operation of the market.

In its final report, the Commission is expected to identify and explain the areas of the IP regime which strike the right balance and those areas which fall short. The Commission is also expected to explain the reasons behind the identified shortcomings in the IP regime (based on evidence) and recommend how to remedy the shortcomings. Of course, the Commission’s recommendations will necessarily be constrained by Australia’s international obligations, which most notably include the TRIPs Agreement and the Australia-US Free Trade Agreement. However, the Commission will also examine the impact those obligations have on Australia’s IP regime.

What makes for a good IP system?

The Commission provides the following principles which it proposes to use as a yardstick in assessing the current IP regime.

  • Effective. The system should be effective in encouraging the creation, and dissemination, of additional IP.
  • Efficient. The system should provide rights for the creation, transfer and enforcement of IP which are proportional to the effort of generating the IP and the benefit that the IP has for society.
  • Adaptable. The system should be adaptive to change and be robust through time to be able to deal flexibly with changes to the economic and technological landscape.
  • Accountable. The system should be evidence-based and transparent. The Commission will examine what sort of information and data is needed to evaluate the IP system and IP rights extensions. The Commission will also look at how the parameters of the current IP system came to be set, and the evidence and analysis on which those parameters were based.

Examination of specific IP rights

The Commission will assess each of the specific forms of IP. The Issues Paper explains the nature of the system governing each of Australia’s IP rights and provides a set of questions by which the Commission proposes to assess the systems governing those rights. The following is a snapshot of the type of questions the Commission is asking as set out in the Issues Paper, and the areas in which the Commission is specifically calling for submissions.

Patents

  • What evidence is there that the patent system has:
    • facilitated innovations that would not otherwise have occurred; or
    • stifled innovation?
  • Does the patent system provide for rewards that are proportional to:
    • the effort required to create patentable inventions; and
    • the resultant benefit of patentable inventions to society?
  • What aspects of the patent system can be improved to encourage innovation and improve the diffusion of patent information?
  • Is the existing coverage of patents optimal? Are there areas of innovation that should be included/excluded?
    • This is a particularly topical question after the recent High Court judgment in which each of the seven judges found that claims for isolated gene sequences are not patentable subject matter. We have written about the High Court decision in an earlier post, which can be found here.

Data protection

  • How does Australia’s current protection of regulatory test data affect innovation and the diffusion of new products?
    • This is also a topical question in light of the recent Trans-Pacific Partnership negotiations in respect of the period of data exclusivity afforded to biologics, which we have previously written about here. The Issues Paper notes that the Australian Government has stated that the TPP will not require any changes to the current five year data protection term for biologics.

Copyright

  • Is the ‘one size fits all’ approach to copyright appropriate? Or does it not adequately incentivise the creation of additional works?
  • How should the balance be struck between creators and consumers in the digital era?
  • What role can fair dealing and/or fair use provisions play in striking a better balance?

In answering these questions, we expect the Commission to have regard to the findings of the recently commissioned economic analysis of recommendations made in the ALRC’s Copyright and the Digital Economy Report, which we previously alerted readers to here.

Trade marks

  • Are trade marks operating as an effective and efficient method for firms to protect their brand and reputation? (E.g., is the cost of objecting to, and enforcing, a trade mark registration reasonable?)
  • What sort of tests could be used to identify when trade marks are being used in anti-competitive ways?
  • What are the costs and benefits of allowing for parallel importation?

Plant breeder’s rights

  • The Commission is specifically seeking evidence from plant breeders and other stakeholders on whether the introduction of plant breeder’s rights (PBRs) has led to a more productive and profitable agriculture sector in Australia.
  • This evidence is called for in circumstances where there are emerging concerns that technological changes (such as molecular plant breeding techniques) are altering the focus of plant breeding activity and potentially making PBRs an uncertain and unsuitable form of protection.

Circuit layout rights

  • The Commission is specifically seeking evidence from integrated circuit developers and other stakeholders in Australia regarding:
    • which circuit layout rights are utilised in Australia and the effectiveness of those rights (compared with patents and trade secrets); and
    • the costs if such rights were abolished.

Geographical indications

  • The Commission is calling for submission on how the role GIs play in protecting branding and reputation, and how GIs help or hinder competition and consumer protection.

We encourage you to make submissions to the Commission

The Commission can only paint an informed and balanced picture of the current IP regime if key stakeholders speak up and contribute evidence based on their experiences. Accordingly, we encourage you to make a submission on any areas which affect, or could potentially affect, your business activities or the industry in which you operate.