In a joint announcement today, the Treasurer and the Minister for Small Business announced that the Productivity Commission will undertake a broad inquiry into Australia’s intellectual property (IP) arrangements.

The inquiry was one of the recommendations set out in the final report of the Harper Competition Policy Review, released on 31 March 2015 (the Harper Review), to focus on:

  • competition policy issues in intellectual property arising from new developments in technology and markets; and
  • the principles underpinning the inclusion of intellectual property provisions in international trade agreements.

The Harper Review noted in its report that disruptive technologies, especially digital technologies, are a pervasive force for change in our economy.  While these technologies foster innovation, which in turn drives growth in living standards, the Harper Review reported that an appropriate balance must be struck between encouraging the adoption of new productivity-enhancing techniques, processes and systems on the one hand, and fostering ideas and innovation on the other.  The Harper Review warned that excessive IP protection can not only discourage adoption of new technologies but also stifle competition. This statement has been controversial.

The Australian Government’s response to the Harper Review has not yet been released.

In line with the Harper Review’s recommendation, the Productivity Commission will be conducting a review of the current Australian IP framework, including the laws relating to copyright, patents, trademarks, geographical indications, registered designs, moral rights, performers’ rights, plant breeders’ rights and circuit layout rights.  The inquiry will consider how the scope and duration of these laws and protections impact upon research and innovation, the cost of goods and services, and competition, trade and investment.

It could be far-reaching because the inquiry seeks to examine whether statutory protections for intellectual property rights are appropriately balanced for productivity, growth and the overall wellbeing of Australian society.  One of the tasks of the Productivity Commission is to recommend changes to the current system of IP laws.  Issues such as 51(3) of the Competition and Consumer Act 2010 (Cth) (CCA), that provides an exemption for IP licences to certain competition law prohibitions in the CCA, are likely to be considered.  The Harper Review recommended its repeal.

The Productivity Commission will also have to take into account the impact of Australia’s numerous trade agreements such as the US Free Trade Agreement (AUSFTA) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

The inquiry will be very important for IP owners and users alike. 

In the current economic climate, Australia is attempting to move away from being heavily reliant on primary industry and resources.  Many political and business leaders across the spectrum have championed the need for Australia to focus on innovation in the services, technology and digital spaces.  It will be interesting to see how the Productivity Commission’s recommendations factor in this shift to the “new economy”, which as our major trading partners such as the US, China and Japan have found, is very much based on IP.

The relevant dates for the inquiry have not been announced.  Once open, the inquiry will run for 12 months, inviting submissions and publishing a draft report on the Productivity Commission website.

The terms of reference for the inquiry are available here.