On 18 August 2015, the Federal Treasurer and Minister for Small Business announced a Productivity Commission inquiry into Australia’s intellectual property arrangements.
The review follows on from the Competition Policy Review undertaken by a panel Chaired by economist Professor Ian Harper (widely known as the “Harper Review”), which recommended that the Productivity Commission be charged with such a review. One of the Harper Review recommendations was that an overarching review should be undertaken, focusing on:
- competition policy issues in intellectual property arising from new developments in technology and markets;
- the principles underpinning the inclusion of intellectual property provisions in international trade agreements; and
- the Australian Government processes for establishing negotiating mandates to incorporate intellectual property provisions in international trade agreements (ensuring that trade negotiations are informed by an independent and transparent analysis of the costs and benefits to Australia of any proposed intellectual property provisions).
These are key features of the Productivity Commission’s Terms of Reference.
The Harper Review Panel expressed a strong view that commercial transactions involving intellectual property rights, including the assignment and licensing of such rights, should be subject to the Competition and Consumer Act 2010 (CCA), in the same manner as transactions involving other property and assets. The Panel recommended that the current (limited) exemption of IP licence and assignment provisions from competition laws set out in section 51(3) of the CCA be immediately repealed. It remains to be seen whether the government will accept this recommendation, or first wait for the outcome of the Productivity Commission review.
The first task for the Productivity Commission is to prepare an Issues Paper; no deadline has been set for the production of this Paper. Interested parties will then have the opportunity to make submissions, before a Final Report is produced.
The Productivity Commission is required to report of the Government within 12 months.
Scope of the Productivity Commission review
The scope of the view is broad and far-reaching.
The Terms of Reference direct the Productivity Commission to:
1. examine the effect of the scope and duration of protection afforded by Australia’s intellectual property system on:
- research and innovation, including freedom to build on existing innovation;
- access to and cost of goods and services; and
- competition, trade and investment.
2. recommend changes to the current system that would improve the overall wellbeing of Australian society, which take account of Australia’s international trade obligations, including changes that would:
- encourage creativity, investment and new innovation by individuals, businesses and through collaboration while not unduly restricting access to technologies and creative works;
- allow access to an increased range of quality and value goods and services;
- provide greater certainty to individuals and businesses as to whether they are likely to infringe the intellectual property rights of others; and
- reduce the compliance and administrative costs associated with intellectual property rules.
3. in undertaking the inquiry and proposing changes, have regard to:
- Australia’s international arrangements, including obligations accepted under bilateral, multilateral and regional trade agreements to which Australia is a party;
- the IP arrangements of Australia’s top intellectual property trading partners and the experiences of these and other advanced economies in reforming their IP systems to ensure those systems meet the needs of the modern economy;
- the relative contribution of imported and domestically produced intellectual property to the Australian economy, for example to Australia’s terms of trade and other economic impacts of IP protection, including on inward investment;
- the Government’s desire to retain appropriate incentives for innovation and investment, including innovation that builds on existing work, and production of creative works;
- the economy-wide and distributional consequences of recommendations on changes to the existing intellectual property system, including on trade and competition;
- ensuring the intellectual property system will be efficient, effective and robust through time, in light of economic and technological changes;
- how proposed changes fit with, or may require changes to, other existing regulation or forms of assistance (such as research subsidies) currently providing incentives for the development of intellectual property;
- the findings and recommendations of the Harper Competition Policy Review in the context of the Australian Government’s response, including recommendations related to parallel import restrictions in the Copyright Act 1968 and the parallel importation defence under the Trade Marks Act 1995; and
- the findings and recommendations of the Advisory Council on Intellectual Property’s Review of the Innovation Patent System; the Senate Economics References Committee’s inquiry into Australia’s innovation system; and the Australian Law Reform Commission’s Copyright and the Digital Economy report.
Overlap with recent reform of Australia’s intellectual property laws
The review will inevitably overlap with much of the work that has been undertaken in recent years into specific areas of Australia’s intellectual property laws, including the IP Laws Amendment (Raising the Bar) Act 2012, which included significant changes to the:
- Patents Act 1990
- Patents Regulations 1991
- Trade Marks Act 1995
- Trade Marks Regulations 1995
- Designs Act 2003
- Designs Regulations 2004
- Plant Breeder’s Rights Act 1994
- Copyright Act 1968
It also follows on from:
- the Senate Economics References Committee’s inquiry into Australia’s innovation system, which is ongoing and not scheduled to conclude until October 2015;
- a review of the Australian Design System by the Government’s Advisory Council on Intellectual Property, which released its report in March 2015 (and to which the Government is yet to respond);
- a review of the Innovation Patent System by the Government’s Advisory Council on Intellectual Property, which released its report in June 2014 (and to which the Government is yet to respond); and
- the Australian Law Reform Commission’s Copyright and the Digital Economy report, which was tabled in Parliament in February 2014.
What is different about the Productivity Commission review is that it will focus on fundamental issues surrounding the benefits afforded by intellectual property rights, and whether the balance is right between intellectual property rights and competition law and policy.
The Productivity Commission has established a website relating to its inquiry, see here.