Australia’s Productivity Commission, an influential government agency, has released its Draft Report on Compulsory Licensing of Patents. The Draft Report contains the following ‘Key Points’:

“There is a clear case to reform the criteria for granting a compulsory licence:

- When a patent is used to engage in unlawful anticompetitive conduct, a compulsory licence should only be available under the Competition and Consumer Act 2010 (Cth.).

- A public interest test should replace existing criteria based on the reasonable requirements of the public; in the Patents Act 1990 (Cth.). For cases other than those relating to unlawful anticompetitive conduct, this would provide an access regime when greater use of a patented invention would deliver a net benefit to the community.”

The Federal Court would remain responsible for deciding whether compulsory licensing was appropriate.

“To reduce uncertainty about international treaty obligations on compulsory licensing, such obligations should be incorporated directly into the Patents Act or its subordinate legislation.”

“The Patents Act contains a less costly and time-consuming alternative to compulsory licensing – termed ‘Crown Use’ – that can be invoked when an invention is used for the services of a government. Two key reforms are proposed:

  • To reduce uncertainty about the scope of Crown Use, the Patents Act should be amended to make it clear that Crown Use can be invoked for the provision of a service that the Australian, State and/or Territory Governments have primary responsibility for funding.
  • To improve accountability and transparency, governments should be required to first seek a negotiated outcome, obtain Ministerial Approval to invoke Crown Use, and publicly state the reasons no less than 14 days before such use occurs. These requirements should be able to be waived in emergencies. In all cases, governments should be required to pay just and reasonable compensation.”

The Draft Report is open for comment until 8 February 2013 following which a Final Report and government response will be delivered.