Intellectual Property Laws Amendment – Senate Report

The Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 (the Bill) was introduced to the Senate on 25 July 2019. The Senate referred the Bill to the Senate Economics Legislation Committee who provided the Senate with a report on 4 September 2019. The Senate Economics Legislation Committee has recommended that the Bill be passed by the Senate.

The Bill implements recommendations from both the Intellectual Property Arrangements Inquiry Report (December 2016) and the Compulsory Licensing of Patents Inquiry Report (April 2013). The Bill proposes to change various patent and IP arrangements by amending the Patents Act 1990 (Cth) (Patents Act), Designs Act 2003 (Cth) (Design Act) and the Trade Marks Act 1995 (Cth) (Trade Marks Act) to:

• begin the process of phasing out the innovation patent system
• incorporate a new objects clause in the Patents Act
• provide further legislative guidance on the operation Crown Use
• provide a new legislative test for when an order can made by the Federal Court for a patentee to grant a licence to another party to exploit an invention.

General

The Bill 2019 was introduced to the Senate on 25 July 2019 and can broadly be split as follows:

1. Patent Act changes – Schedule 1 of the Bill includes amendments to introduce an objects clause into the Patents Act and to begin the phasing out of the innovation patent system.
2. Crown use – Schedules 2 – 3 of the Bill will make several changes to the Crown use provisions for patents and designs respectively.
3. Compulsory Licencing – Schedule 4 of the Bill amends the compulsory licensing provisions of the Patents Act.
4. Efficiency – Schedules 5 – 8 of the Bill will make several technical amendments to the Patents Act and Trade Marks Act to streamline procedures and increase efficiency.

Patent Act changes

Schedule 1 of the Bill does two things:

• introduces an 'Objects clause' into the Patents Act
• abolishes the innovation patent system.

Objects Clause

The Objects clause states:

"The object of this Act is to provide a patent system in Australia that promotes economic wellbeing through technological innovation and the transfer and dissemination of technology. In so doing, the patent system balances over time the interests of producers, owners and users of technology and the public."

This reflects a recommendation of the Productivity Commission Report as a method to aid courts in interpreting the Patents Act in cases where the text of the legislation is uncertain or ambiguous. Importantly, the Explanatory Memorandum makes clear that the Objects clause does not alter the ordinary meaning of the legislation or overturn existing case law and established precedent. Further, the objects are not intended to have any effect on the existing requirements for the grant of a patent.

Innovation Patent

The Innovation Patent provided SMEs a way to secure patent rights for a shorter term with a less onerous certification test requiring only a 'innovative' step for registration, and prima facie 'granted' status on application. However, the tool was misused, underutilised and considered too easy to apply for.

The Productivity Commission has recommended that it be phased out. This Bill begins the phase out process by setting a requirement that an innovation patent (or specification) of an innovation patent cannot be accepted unless the priority date is earlier than this amendment.

Crown use

This is Schedule 2 and 3 for Designs Act and Patents Act respectively.

Broadly the amendments here relate to a 2013 Productivity Commission Report to provide more clarity about how a Commonwealth, State or Territory entity can use an invention without infringing a patent and the rights the patent holder has in such a situation. To summarise the amendments:

• The relevant Commonwealth, State or Territory entity may exercise a right of 'Crown use' under the patent provided:
  • the patent is in the field in which the authority operates
  • the patent relates to the entity’s responsibilities.

• The relevant Commonwealth, State or Territory entity must try for a reasonable period, to obtain from the applicant of a patent, or the patentee, an authorisation to exploit the invention on reasonable terms.
• There is an exemption from point two above in an emergency scenario.
• There is a requirement for the Minister of the relevant Commonwealth, State or Territory entity to provide written approval prior to exercising Crown use. Included are several considerations for the Minister prior to granting approval.
• There is a requirement that should Crown use be exercised, the patent owner must be notified of the reasons for the decision. The reasons must be given to the patent owner prior to exploitation under the Crown use provisions, or if an emergency, as soon as practicable afterwards.
• When determining the amount of remuneration for using a patent through Crown use, the prescribed court must determine an amount of remuneration that is just and reasonable and must consider the economic value of the exploitation of the invention and any other matter the court considers relevant.

There are a number of flow-on amendments to Crown use reflecting the changes described above, including transitional arrangements to put these amendments in place as soon as possible. These are substantial changes to the Crown use framework which provide some clarity around the many issues that surround Crown use.

Compulsory licensing

Not to be confused with Crown use, a compulsory licence is an order made by the Federal Court for a patentee to grant a licence to another party to exploit an invention. A third party (including private entity) could previously use compulsory licensing when there was a reasonable requirement by the public for the patented item.

The core change the Bill introduces is to replace the previous test with a 'public interest' test. Ideally, this provides more latitude in what the Federal Court may consider when granting a compulsory licence.

Efficiency

The following changes are to promote efficiencies using electronic systems and correcting some errors:

• Both the Patent Act and Trade Marks Act are being permitted to have electronic seals and certification processes.
• Clarification that 'omnibus' claims are no longer permitted in a patent unless necessary.
• Updates to information protection processes for Patents
• Removal of the requirement of a certificate of verification for translated patents.

While most of the Bill begins on the date of Royal Assent, the proposed changes to the innovation patent system begin 12 months after the day the Bill receives the Royal Assent to protect existing patent applicants patent rights.

Agencies, individuals and businesses should consider seeking advice on how this Bill may affect its interests should they:

• have an interest in preventing the abolishment of innovation patents
• have an interest in the Crown use provisions
• have had any difficulties with the compulsory licencing provisions.