IP Australia has released an “Exposure Draft” of the Intellectual Property Laws Amendment Bill 2012 (“Bill”). If enacted, the Bill would introduce a special purpose compulsory licensing system for patented pharmaceuticals, with the aim of helping developing nations deal with health epidemics, such as HIV/AIDS and malaria.

There is an existing compulsory license scheme under the Patents Act, which is consistent with Australia’s obligations under TRIPS (the Agreement on Trade-Related Aspects of Intellectual Property Rights).  Pursuant to TRIPS, products made under a compulsory license must be predominantly for the supply of the domestic market and are not permitted to be exported.

On 30 August 2003, the WTO agreed to an interim waiver of those provisions to allow pharmaceutical manufacturers to supply generic copies of patented medicines to the world’s least developed countries facing specific and prolonged health crises (“WTO decision”). This position was formalised on 6 December 2005 by the WTO’s adoption of the Doha Declaration on the TRIPS Agreement and Public Health (“TRIPS Protocol”), which amends TRIPS accordingly. The TRIPS Protocol must be accepted by two-thirds of WTO members before it comes into force, however Australia has agreed to the TRIPS Protocol.

If passed, the Bill will implement the WTO decision and ultimately, when it enters into force, the TRIPS Protocol.  Crucially, the Bill will allow Australian generic pharmaceutical companies to supply patented pharmaceuticals to eligible developing countries (those facing significant health problems) either with the authorisation of the innovator company, or under a compulsory licence issued by the Federal Court.

Links to the Draft Bill and Explanatory Memorandum can be found here.