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David Bradbury

Assistant Treasurer, Minister Assisting for Financial Services & Superannuation and Minister for Competition Policy & Consumer Affairs

5 March 2012 - 18 September 2013

Media Release of 29/06/2012

NO.059

Balancing Access to Technology and Innovation

Joint Media Release with
Mark Dreyfus MP
Parliamentary Secretary for
Climate Change and Energy Efficiency

The Assistant Treasurer, David Bradbury, and the Parliamentary Secretary for Industry and Innovation, Mark Dreyfus, today announced a review by the Productivity Commission into compulsory licensing in the patents system.

The compulsory licensing provisions in the Patents Act 1990 safeguard against anti‑competitive behaviour that might result from the exclusive rights obtained through a patent.

"We want to ensure there are no unnecessary delays or impediments to accessing technology. The compulsory licensing provisions are a key protection mechanism to ensure access and an important step in implementing the Government's Response to the Gene Patents Report," said Mr Dreyfus.

Previous Senate Committee and Australian Law Reform Commission reports on gene patents recommended a review of the operation of compulsory licensing provisions in the Patents Act 1990. The review will examine whether, and how, to ensure access to patented technology while maintaining the patent incentive to create and protect new technology.

"The Commission will review a range of leading international practices, including the processes under which the current provisions can be used. It will consider any alternative mechanisms, and recommend measures to raise awareness of these safeguard provisions, in particular within the small business and healthcare sector," said Mr Bradbury.

Compulsory licensing is an increasingly sensitive issue internationally, particularly in the context of access to affordable health care. Accurate medical advice relies in part on the identification and use of gene sequences related to human health and disease.

Of concern to government is a perception that patents over genetic technologies, or a perceived lack of licences to use these patents in Australia, unreasonably restricts or delays patient access to medical advice based on the latest diagnostic tests. Other areas of sensitivity include climate change mitigation, food security and alternative energy technologies, and technical standards essential patents (for example, in telecommunication technologies).

The Productivity Commission will hold public hearings and release a draft report for public comment, before delivering a final report to the Government in nine months.

The Terms of Reference for the inquiry are attached. For more information, visit the Productivity Commission's website.

29 June 2012


Attachment

Terms of Reference

Inquiry into compulsory licensing provisions in the Patents Act 1990

I, David Bradbury, Assistant Treasurer and Minister Assisting for Deregulation, pursuant to Parts 2 and 3 of the Productivity Commission Act 1998, hereby request that the Productivity Commission undertake an inquiry into the compulsory licensing provisions in the Patents Act 1990.

Background - balancing access to technology and innovation

The compulsory licensing provisions in the Patents Act 1990 are a key safeguard, which may be invoked where the exercise of the exclusive rights conferred by a patent are not meeting the reasonable requirements of the public or constitute anti-competitive conduct.

In Australia, these provisions are used rarely and there are opposing views on their effectiveness. Infrequent use is attributed to significant barriers to accessing the provisions, or as a result of the deterrent effect of the provisions, which induces patent holders to enter into voluntary licences for their patented inventions.

Australia is a net importer of technology. Of the 14,557 patents granted in 2010, 1,178 (8 per cent) were granted to Australian residents. Overall, the likely benefit of these provisions is their use as a deterrent in licensing negotiations between a foreign patent holder and potential licensee in Australia, in order to ensure domestic access to technology and technology diffusion.

In November 2011, the Government's Response to recommendation 12 of the Senate Community Affairs References Committee's Gene Patents Report November 2010 and recommendation 27-1 of the Australian Law Reform Commission, Genes and Ingenuity: Gene Patenting and Human Health (ALRC 99, 2004) Report, endorsed a review of the operation of the compulsory licensing provisions in the Patents Act 1990, including measures to raise awareness of these provisions.

Compulsory licensing is an increasingly sensitive issue internationally, particularly in the context of access to affordable healthcare, and concerns that gene patents may prevent equitable access to medical advice that relies on the identification and use of gene sequences related to human health and disease. Other areas of sensitivity include climate change mitigation, food security and alternative energy technologies, and technical standards essential patents (e.g. in telecommunication technologies).

Compulsory licensing provisions are a feature of many patent laws around the world, and are included in international agreements to which Australia is a party.

Scope of the inquiry

The Commission is requested to review the operation of the compulsory licensing provisions in the Patents Act 1990, in particular:

  1. Assess whether the current Australian provisions can be invoked efficiently and effectively to deal with circumstances where reasonable requirements of the public are not being met or where the patentee engages in anti-competitive conduct. This includes, but is not limited to, consideration of concerns that gene patents may hinder access to affordable healthcare, including access to medical advice that relies on the identification and use of gene sequences related to human health and disease.
  2. Advise on the frequency, and impact, of the issue of compulsory licences in comparable markets and the common features in such compulsory licenses.
  3. Recommend any measures that may be required to efficiently and effectively exercise these safeguard provisions and invoke their use in a manner consistent with Australia's international obligations, without limiting access to overseas technologies, technology transfer, research and development investments or substantially reducing the patent incentive for innovation.
  4. Recommend any alternative mechanisms deemed necessary to ensure that the balance between incentives to innovate and access to technology best reflect objectives of ensuring reasonable access to health care solutions, maximising economic growth and growing the Australian manufacturing industry.
  5. Recommend measures to raise awareness of these provisions and their purpose, including the specific challenges of raising awareness among small businesses and the healthcare sector.

In conducting the inquiry, the Commission should have regard to:

  1. the importance of incentives for industry and researchers to invest in research and development, and innovation;
  2. access to and transfer of technology, including climate change mitigation, food security, healthcare and alternative energy technologies, and standard essential patents in telecommunication technologies, particularly where multiple patentees are involved;
  3. affordable and equitable access to healthcare, including medical treatments and diagnostic tests in Australia;
  4. recent changes to the intellectual property system reflected in the Intellectual Property Laws Amendment (Raising the Bar) Act 2012, including the research exemption;
  5. other relevant parts of the intellectual property system, such as crown use provisions; and
  6. the range of international approaches.

The Commission will report within nine months of receipt of this reference and will hold hearings for the purpose of this inquiry. The Commission is to provide both a draft and a final report, and the reports will be published. The Government will consider the Commission's recommendations, and its response will be announced as soon as possible after the receipt of the Commission's final report.