The Australian Government has released its response to the Productivity Commission’s inquiry into Australia’s IP system. The report may be found here.

The Government has made a number of recommendations across Australia’s intellectual property system. While the implementation of the recommendations will be some time away, some dramatic changes are proposed. Perhaps the most significant recommendation proposed is the abolition of Australia’s Innovation patent system and to further “raise the bar” on the inventiveness threshold for patents (to align with the European Patent Office).

The main recommendations are:

Copyright

Copyright use and licensing

  • Amend the Copyright Act 1968 (Cth) to make unenforceable any part of an agreement restricting or preventing a use of copyright material that is permitted by a copyright exception
  • Amend the Copyright Act 1968 (Cth) to permit consumers to circumvent technological protection measures for legitimate uses of copyright material.
  • Amend the Copyright Act 1968 (Cth) to make clear that it is not an infringement for consumers to circumvent geoblocking technology
  • Amend the Copyright Act 1968 (Cth) to avoid any international agreements that would prevent or ban consumers from circumventing geoblocking technology.
  • The Australian Government should proceed to repeal parallel import restrictions for books to take effect no later than the end of 2017.

Fair use or fair dealing

  • The Australian Government should accept and implement the Australian Law Reform Commission’s final recommendations regarding a fair use exception in Australia.
  • The Australian Government should enact the Australian Law Reform Commission recommendations to limit liability for the use of orphan works, where a user has undertaken a diligent search to locate the relevant rights holder.

Patents

Generally

  • The Australian Government should incorporate an objects clause into the Patents Act 1990 (Cth). The objects clause should describe the purpose of the legislation as enhancing the wellbeing of Australians by promoting technological innovation and the transfer and dissemination of technology. In so doing, the patent system should balance over time the interests of producers, owners and users of technology.
  • The Australian Government should amend the Patents Act 1990 (Cth) such that an invention is taken to involve an inventive step if, having regard to the prior art base, it is not obvious to a person skilled in the relevant art. The Explanatory Memorandum should state:
    • a ‘scintilla’ of invention, or a scenario where the skilled person would not ‘directly be led as a matter of course’, are insufficient thresholds for meeting the inventive step
    • the ‘obvious to try’ test applied in Europe would in some instances be a suitable test
  • IP Australia should reform its patent filing processes to require applicants to identify the technical features of the invention in the set of claims.
  • IP Australia should restructure patent renewal fees such that they rise each year at an increasing rate (including years in which patents receive an extension of term) — fees later in the life of a patent would well exceed current levels. IP Australia should reduce the initial threshold for claim fees, and increase claim fees for applications with a large number of claims.

Innovation patent system

  • The Australian Government should abolish the innovation patent system.

Pharmaceuticals

  • The Australian Government should reform extensions of patent term for pharmaceuticals such that they are only:
    • available for patents covering an active pharmaceutical ingredient, and
    • calculated based on the time taken by the Therapeutic Goods Administration for regulatory approval over and above 255 working days (one year).
  • The Australian Government should reform s. 76A of the Patents Act 1990 (Cth) to improve data collection requirements for extensions of term, drawing on the model applied in Canada. Thereafter no extensions of term should be granted until data is received in a satisfactory form.
  • The Australian Government should introduce a system for transparent reporting and monitoring of settlements between originator and generic pharmaceutical companies to detect potential pay‑for‑delay agreements. This system should be based on the model used in the United States, administered by the Australian Competition and Consumer Commission, and include guidelines on the approach to monitoring as part of the broader guidance on the application of the Competition and Consumer Act 2010 (Cth) to intellectual property (recommendation 15.1).
  • The monitoring should operate for a period of five years. Following this period, the Australian Government should review the regulation of pay‑for‑delay agreements (and other potentially anticompetitive arrangements specific to the pharmaceutical sector).

Trade marks

Generally

  • Amend the Trade Marks Act 1995 (Cth) to reduce the grace period from 5 years to 3 years before new registrations can be challenged for non‑use
  • Amend the Trade Marks Act 1995 (Cth) to remove the presumption of registrability in assessing whether a mark could be misleading or confusing at application
  • Ensure that parallel imports of marked goods do not infringe an Australian registered trade mark when the marked good has been brought to market elsewhere by the owner of the mark or its licensee. Section 97A of the Trade Marks Act 2002 (New Zealand) could serve as a model clause in this regard.
  • Require those seeking trade mark protection to state whether they are using the mark or ‘intending to use’ the mark at application, registration and renewal, and record this on the Australian Trade Mark On‑line Search System (ATMOSS). It should also seek confirmation from trade mark holders that register with an ‘intent to use’ that their mark is actually in use following the grace period, with this information also recorded on the ATMOSS
  • Require the Trade Marks Office to return to its previous practice of routinely challenging trade mark applications that contain contemporary geographical references (under s. 43 of the Trade Marks Act)
  • Link the ATMOSS database to the Australian Securities and Investment Commission business registration portal, including to ensure a warning if a business registration may infringe an existing trade mark.

Geographical indications

  • The Australian Government should amend the Australian Grape and Wine Authority Act 2013 (Cth) and associated regulations to allow the Geographical Indications (GIs) Committee to amend or omit existing GIs in a manner similar to existing arrangements for the determination of a GI (including preserving the avenues of appeal to the Administrative Appeals Tribunal). Any omissions or amendments to GIs determined in such a manner should only take effect after a ‘grace period’ determined by the GI Committee on a case‑by‑case basis.

Litigation/enforcement

Compliance and enforcement of IP rights

  • The Australian Government should introduce a specialist IP list in the Federal Circuit Court, encompassing features similar to those of the United Kingdom Intellectual Property Enterprise Court, including limiting trials to two days, caps on costs and damages, and a small claims procedure.
  • The jurisdiction of the Federal Circuit Court should be expanded so it can hear all IP matters. This would complement current reforms by the Federal Court for management of IP cases within the National Court Framework, which are likely to benefit parties involved in high value IP disputes.
  • The Federal Circuit Court should be adequately resourced to ensure that any increase in its workload arising from these reforms does not result in longer resolution times.
  • The Australian Government should assess the costs and benefits of these reforms five years after implementation, also taking into account the progress of the Federal Court’s proposed reforms to IP case management.