The Federal Government has given the green light to the Productivity Commission to undertake a comprehensive review of Australia’s IP regime (Inquiry).  The Commission must provide a report on the Inquiry by August 2016.

The Inquiry was one of the three recommendations relating to IP in the Final Report of the Competition Policy Review (also known as the Harper Review), which we have previously written about here. The Harper Report emphasised the need for an over-arching review to assess whether the current IP regime strikes the right balance between providing incentives to invest in innovation in Australia and fostering a competitive economy, noting that “excessive IP protection can not only discourage adoption of new technologies but also stifle innovation”.

Yet another IP review? 

The announcement has been met with sighs and protestations that the Government is asking for ‘yet another’ review of Australia’s intellectual property policies.

Nonetheless, this is the first time an independent body has embarked on a holistic review of Australia’s IP regime since the Henry Ergas Intellectual Property and Competition Review in 2000. More recent reviews, such as the ALRC’s 2014 report on Copyright and the Digital Economy, IP Australia’s 2013 Review of Pharmaceutical Patents and ACIP’s very recent review of the Innovation Patent System, have only examined discrete parts of the regime.

The Inquiry is timely not only because the Government has largely failed to act on recent IP reviews, but also because the Trans-Pacific Partnership (TPP) negotiations are nearing the pointy end. The leaked IP Chapter of the TPP proposes longer and stronger IP rights, and the Investment Chapter proposes that IP owners could seek investor-state dispute settlement in certain circumstances.

In relation to IP provisions in international trade agreements, the Harper Report advised that “trade negotiations should be informed by an independent and transparent analysis of the costs and benefits to Australia of any proposed IP provisions.”

Of course, there is no guarantee that the Inquiry will be resolved before the TPP is concluded, and even if it is, that the Government will take heed of the Commission’s recommendations.

Scope of the Inquiry

The Commission’s assignment is to:

  • examine the effect of the scope and duration of IP protection under the current regime on:
    • research and innovation;
    • competition, trade and investment; and
    • access to and cost of goods and services; and
  • recommend changes to the current regime that would encourage creativity, investment and innovation without detracting from competition and economic growth.

In undertaking its overarching review, the Commission has been directed to examine a number of areas, which include:

  • the IP arrangements of Australia’s top IP trading partners;
  • the relative contribution of imported and domestically produced IP to the Australian economy;
  • restrictions to parallel importation under the Copyright Act and the parallel importation defence under the Trade Marks Act; and
  • ACIP’s recent review of the innovation patent system and the ALRC’s report on Copyright and the Digital Economy.

Given the broad scope of the Inquiry, we can also expect the Commission to consider:

  • the net cost to the Australian economy of the extension of pharmaceutical patent terms;
  • data exclusivity for biologics;
  • the section 51(3) exception under the Competition and Consumer Act (relating to commercial transactions involving IP);
  • fair dealing exceptions and orphan works under the Copyright Act;
  • changes required to various aspects of the regime to ensure that it is robust to deal with the ongoing growth of digital technologies; and
  • the recommendations in the 2013 House of Representatives Committee Report on the IT Pricing Inquiry (which investigated the regional pricing strategies implemented by major vendors and copyright holders, often referred to as the ‘Australia tax’).

The Commission is also likely to examine the impact of the TRIPS Agreement and the US Free Trade Agreement on the Australian economy. In its 2010 Report on Bilateral and Regional Trade Agreements, the Commission was vocal about the dangers of the Government extending IP rights without careful consideration of the effects that extension would have on the Australian economy, especially in circumstances where Australia is a net importer of IP. Accordingly, we can also expect the Commission to recommend a framework for the Government to conduct a cost/benefit analysis when it is considering changing the scope and duration of IP protection in the context of trade agreements.

Submissions

The Commission is calling for submissions from interested parties, which can be lodged here. We encourage you to make a submission on areas which affect, or could potentially affect, your business activities or the industry in which you operate. The Commission is planning to set the deadline for submissions in the next two weeks.