Nielsen, Jane; Nicol, Dianne --- "Whither Patent Use Without Authorisation in Australia?" [2008] FedLawRw 14; (2008) 36(3) Federal Law Review 331
[*] B Com LLB (Comb) (Hons), PhD, Lecturer, Faculty of Law, University of Tasmania.
[**] BSc (Hons), MSc, PhD, LLB (Hons), LLM, Associate Professor, Faculty of Law, University of Tasmania. The authors thank Mr Lynden Griggs for his extensive and thoughtful comments on this paper. They are also grateful to two anonymous referees for their valuable suggestions for improving the paper.
[1] In Australian law, the Patents Act 1990 (Cth) prescribes in s 67 that the term of a standard patent is 20 years. Section 68 prescribes a shorter duration of eight years for innovation patents. Sections 70–79A allow for extension of the term of standard patents for certain pharmaceutical substances for up to five years, subject to certain conditions and limitations.
[2] Roberto Mazzoleni and Richard R Nelson, 'Economic Theories about the Benefits and Costs of Patents' (1998) 32 Journal of Economic Issues 1031. For earlier debate about this theory see Kenneth J Arrow, 'Economic Welfare and the Allocation of Resources for Invention' in Richard R Nelson (ed), The Rate and Direction of Inventive Activity: Economic and Social Factors (1962) 609; William D Nordhaus, Invention, Growth and Welfare: A Theoretical Treatment of Technological Change (1969).
[3] It should be noted that while the terms 'invention' and 'innovation' are conceptually distinct, they are often used synonymously, even by leading commentators in the field. See, eg, Mark A Lemley and Dan L Burk, 'Policy Levers in Patent Law' (2003) 89 Virginia Law Review 1575, particularly at 1871, 1875 and n 58.
[4] However, it is recognised that this is not necessarily the only function of the patent system. Clarisa Long, in particular, argues that this simple view of the patent system provides only part of the picture and that firms may obtain patents for a range of other reasons. She reasons that the information disclosure function of the patent system can be as important to patentees as to observers as it gives them the opportunity to 'credibly convey information about the invention to observers': Clarisa Long, 'Patent Signals' (2002) 69 University of Chicago Law Review 625, 636. See also Mazzoleni and Nelson, above n 2.
[5] Intellectual Property and Competition Review Committee, Parliament of Australia, Review of Intellectual Property Legislation Under the Competition Principles Agreement: Final Report (2000) ('IPCRC Report') 6.
[6] Federal Trade Commission, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy (2003) ch 2, 3–7.
[7] Ibid; Michael A Carrier, 'Unravelling the Patent-Antitrust Paradox' (2002) 150 University of Pennsylvania Law Review 761, 770.
[8] Louis Kaplow, 'The Patent-Antitrust Intersection: A Reappraisal' (1984) 97 Harvard Law Review 1813, 1821–3.
[9] Suzanne Scotchmer, 'Standing on the Shoulders of Giants: Cumulative Research and the Patent Law' (1991) 5 Journal of Economic Perspectives 29, 31; John H Barton, 'Patents and Antitrust: A Rethinking in Light of Patent Breadth and Sequential Innovation' (1997) 65 Antitrust Law Journal 449.
[10] See Jane Nielsen, 'Innovation in Medical Biotechnology: Mapping the Intersection of Intellectual Property and Competition Law' (2007) 35 Australian Business Law Review 407, 412–17.
[11] Commission on Intellectual Property Rights, Innovation and Public Health, Public Health Innovation and Intellectual Property Rights (2006) 8.
[12] Ibid. See also William W Fisher and Talha Syed, 'Global Justice in Healthcare: Developing Drugs for the Developing World' (2007) 40 UC Davis Law Review 581.
[13] However, the extent to which existing provisions and current interpretations of existing provisions by the courts achieve this aim is contentious and is a matter of ongoing concern for law reform agencies. For example, at the time of writing the Australian Advisory Council on Intellectual Property ('ACIP') is undertaking a review of patentable subject matter. See ACIP, Patentable Subject Matter Issues Paper (2008) <http://www.acip.gov.au/reviews.html> at 23 July 2008.
[14] Australian Law Reform Commission, Genes and Ingenuity: Gene Patenting and Human Health, Report No 99, (2004) ('ALRC Report') chs 26, 27.
[15] Patents Act 1903 (Cth) s 87.
[16] The Australian provisions relating to Crown use are discussed below in Part VI. Other countries that have similar provisions include the United Kingdom ('UK') and New Zealand. It should be noted that, in Canada, Crown use (or compulsory licensing, as it is referred to in the Canadian legislation) requires authorisation by the Commissioner of Patents. See ALRC, above n 14, 600.
[17] On this point see generally ibid 594–5.
[18] Other categories of provisions limiting the patent monopoly include experimental use and prior use of the patented invention. Experimental use exemptions are expressly included in patent legislation in a number of jurisdictions. For example, in the UK this exclusion is included in s 60(5) of the Patents Act 1977 (UK). In other jurisdictions, including Australia, law reform agencies have recommended legislative reform in order to include them: see particularly ALRC, above n 14, ch 13. See also Advisory Council on Intellectual Property, Patents and Experimental Use (2005) ('ACIP Report on Experimental Use'). The prior use exemption allows users to continue to do what they did before the patent monopoly was granted. In Australia, the Intellectual Property Amendment Act 2006 (Cth) amended the prior use provision in s 119 of the Patents Act 1990 (Cth). Another exemption in this category applies specifically to pharmaceuticals. It allows generic manufacturers to commence the onerous process of obtaining regulatory approval to market generic versions of patented drugs before the patent expires. In Australia, for example, see s 119A of the Patents Act 1990 (Cth) as amended by the Intellectual Property Laws Amendment Act 2006 (Cth).
[19] ALRC, above n 14, 594, 611.
[20] See Friedrich-Karl Beier, 'Exclusive Rights, Statutory Licenses and Compulsory Licenses in Patent and Utility Model Law' (1999) 30 International Review of Industrial Property and Copyright Law 251, 260.
[21] IPCRC, above n 5; ALRC, above n 14; ACIP, Review of Crown Use Provisions for Patents and Designs (2005) ('ACIP Report on Crown Use').
[22] The most relevant multilateral agreement is the TRIPS Agreement: Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3, annex 1C (Agreement on Trade-Related Aspects of Intellectual Property Rights) (entered into force 1 January 1995); and the most relevant bilateral agreement is the AUSFTA: Australia – United States Free Trade Agreement, 18 May 2004, [2005] ATS 1 (entered into force 1 January 2005).
[23] An exclusive licence permits the exploitation of an invention by a licensee to the exclusion of all others, whereas a non-exclusive licence allows exploitation in conjunction with a number of other licensees. A sole licence gives the licensee the right to exploit an invention along with the patent holder.
[24] Patents Act 1990 (Cth) s 133(2)(a).
[25] Patents Act 1990 (Cth) s 133(2)(b).
[26] Patents Act 1990 (Cth) s 133(3A). It should be noted that this provision was introduced in 1994 by the Patents (World Trade Organization Amendments) Act 1994 (Cth) s 11(b) to ensure compliance with the TRIPS Agreement. The Patents Act also provides for revocation of a patent where a compulsory licence has been granted for a failure to work a patent, provided the reasonable requirements of the public have not been met: at s 134.
[27] Patents Act 1990 (Cth) s 133(3B). This provision was also inserted by the Patents (World Trade Organization Amendments) Act 1994 (Cth) s 11(b).
[28] Patents Act 1990 (Cth) s 133(3B)(a). See also ALRC, above n 14, 625–8.
[29] Patents Act 1990 (Cth) s 133(3B). For further details on when a compulsory licence may be granted, and the conditions on which a grant is predicated, see ALRC, above n 14, 617–21; Dianne Nicol and Jane Nielsen, 'The Australian Medical Biotechnology Industry and Access to Intellectual Property: Issues for Patent Law Development' [2001] SydLawRw 16; (2001) 23 Sydney Law Review 347, 370–71.
[30] This provision also remains unchanged as a result of recent amendments to the Patents Act.
[31] The only reported case in relation to the compulsory licensing provisions is Fastening Supplies Pty Ltd v Olin Mathieson Chemical Co [1969] HCA 61; (1969) 119 CLR 572.
[32] The old ss 133(2)(a), 2(b) and (3A) were all merged into the single paragraph s 133(2)(a) through the IPLAA sch 8 cl 2. As will be discussed in detail below in Part III.B, a new s 133(2)(b) was added to provide for compulsory licensing for contravention of the Trade Practices Act 1974 (Cth).
[33] Defined as the Commonwealth or a State, an authority of the Commonwealth or a State, or a person authorised in writing by the Commonwealth or a State: Patents Act 1990 (Cth) s 162.
[34] Patents Act 1990 (Cth) s 164.
[35] Patents Act 1990 (Cth) s 165. The requirement for remuneration was introduced by the Patents (World Trade Organization Amendments) Act 1994 (Cth) s 15.
[36] However, s 165A of the Patents Act does give the patent holder the opportunity to apply for an order that such exploitation must cease. This provision was introduced by the Patents (World Trade Organization Amendments) Act 1994 (Cth) s 16.
[37] General Steel Industries Inc v Commissioner of Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125.
[38] Stack v Brisbane City Council [1995] FCA 1427; (1995) 32 IPR 69.
[39] We canvass this issue fully in Part VI.
[40] As an example, India has been able to develop a generic pharmaceutical industry because, in the past, patent legislation expressly excluded pharmaceuticals from patenting in that country: see Jane Nielsen and Dianne Nicol, 'Pharmaceuticals and Patents: The Conundrum of Access and Incentive' (2002) 13 Australian Intellectual Property Journal 289, 293.
[41] For example, the Paris Convention for the Protection of Industrial Property was first agreed to in 1883, although it has been revised since that time. The main aims of this Convention are to ensure the equal treatment of foreign and national applications for patents, and that the first applicant in one country has priority over other applicants for the same invention in different countries. Australia has ratified this and various other international IP instruments.
[42] For background information on these historical developments, see, eg, the following series of articles: R Michael Gadbaw, 'Intellectual Property and International Trade: Merger or Marriage of Convenience?' (1989) 22 Vanderbilt Journal of Transnational Law 223; Carlos Alberto Primo Braga, 'The Economics of Intellectual Property Rights and the GATT: A View from the South' (1989) 22 Vanderbilt Journal of Transnational Law 243; Robert W Kastenmeier and David Beier, 'International Trade and Intellectual Property: Promise, Risks, and Reality' (1989) 22 Vanderbilt Journal of Transnational Law 285; Frederick M Abbott, 'Protecting First World Assets in the Third World: Intellectual Property Negotiations in the GATT Multilateral Framework' (1989) 22 Vanderbilt Journal of Transnational Law 689; Jerome H Reichman, 'Intellectual Property in International Trade: Opportunities and Risks of a GATT Connection' (1989) 22 Vanderbilt Journal of Transnational Law 747.
[43] Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3, annex 1C (entered into force 1 January 1995) ('TRIPS Agreement' or 'TRIPS').
[44] Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995).
[45] See WTO, Overview: the TRIPS Agreement <http://www.wto.org/english/tratop_e/ trips_e/intel2_e.htm> at 23 July 2008. Note also that in India — Patent Protection for Pharmaceutical and Agricultural Chemical Products, WTO Doc WT/DS50/AB/R (1997) (Report of the Appellate Body) it was held that through art 1.1 members are not obliged to implement more extensive protection than was expressly agreed in TRIPS. See also Jerome Reichman, 'The TRIPS Agreement Comes of Age: Conflict or Cooperation with the Developing Countries' (2000) 32 Case Western Reserve Journal of International Law 441, 445.
[46] On this point see Bryan Christopher Mercurio, 'TRIPS-plus Provisions in FTAs: Recent Trends' in Lorand Bartels and Frederico Ortino (eds), Regional Trade Agreements and the WTO Legal System (2006) 215.
[47] To use the language of one prominent commentator, the US is using the strategy of forum shifting to ratchet up IP protection at the international level: see Peter Drahos, Expanding Intellectual Property's Empire: the Role of FTAs (2003) <http://cgkd.anu.edu.au/menus/PDFs/IPRatchet_Drahos.pdf> at 23 July 2008, 6–11. See also ibid.
[48] It should be noted that art 30 of TRIPS is also relevant, in that it allows member countries to provide limited exceptions to the exclusive rights conferred by a patent, provided that: 'such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.' This provision legitimises such uses as: experimental use, prior use and use for obtaining regulatory approval of generic pharmaceuticals.
[49] TRIPS Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1C, art 31(b) (entered into force 1 January 1995).
[50] Ibid.
[51] Declaration on the TRIPS Agreement and Public Health, WTO Doc WT/MIN(01)/DEC/2 (2001) ('DOHA WTO Ministerial Declaration')
<http://www.wto.org/english/thewto_e/minist_e/min01_e/ mindecl_trips_e.htm> at 23 July 2008. For further background information on the Doha Declaration, see Frederick Abbott, 'The Doha Declaration on the TRIPS Agreement and Public Health: Lighting a Dark Corner at the WTO' (2002) 5 Journal of International Economic Law 469.
[52] Declaration on the TRIPS Agreement and Public Health, WTO Doc WT/MIN(01)/DEC/2 (2001) art 4. See also TRIPS Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1C, art 8 (entered into force 1 January 1995).
[53] Declaration on the TRIPS Agreement and Public Health, WTO Doc WT/MIN(01)/DEC/2 (2001), art 5.
[54] See Nielsen and Nicol, above n 40, 299–301.
[55] TRIPS Agreement, opened for signature 15 April 1994, 1867 UNTS 3, annex 1C, art 31(k) (entered into force 1 January 1995). The issue of compulsory licensing to remedy anti-competitive conduct is discussed in detail below in Part IV.
[56] Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, WTO Doc WT/L/540 and Corr 1 (2003) ('Decision of the General Council of 30 August 2003') <http://www.wto.org/english/tratop_e/trips_e/implem_para6_e.htm> at 23 July 2008.
[57] See, eg, Médecins Sans Frontières, Neither Expeditious, Nor a Solution: The WTO August 30th Decision is Unworkable (2006).
[58] For commentary on the Canadian legislation see Matthew Rimmer, 'The Jean Chrétien Pledge to Africa Act: Patent Law and Humanitarian Aid' (2005) 15 Expert Opinion on Therapeutic Patents 889.
[59] Information on notifications is available at WTO, Notifications by Importing WTO Members <http://www.wto.org/english/tratop_e/trips_e/public_health_notif_import_e.htm> at 23 July 2008.
The notification refers to plans to import of 260,000 packs of TriAvir, a combination of anti-retrovirals manufactured in Canada by Apotex, Inc, over the next two years.
[60] Amendment to the TRIPS Agreement, WTO Doc WT/L/641 (2005) (General Council) <http://www.wto.org/english/tratop_e/trips_e/wtl641_e.htm> at 23 July 2008.
[61] Amendment of the TRIPS Agreement – Extension of the Period for the Acceptance by Members of the Protocol Amending the TRIPS Agreement, WTO Doc WT/L/711 (2007) (General Council).
[62] Evidence to Joint Standing Committee On Treaties, Parliament of Australia, Canberra, 22 June 2007 (Matthew Rimmer).
[63] Introduced through the Patents (World Trade Organisation Amendments) Act 1994 (Cth).
[64] Patents Act 1990 (Cth) s 133(3A), introduced by the Patents (World Trade Organization Amendments) Act 1994 (Cth) s 11(b).
[65] ACIP, 'Report on Crown Use', above n 21, 16. ACIP's consideration of this matter will be discussed below, Part VI.
[66] Details on Australia's Free Trade Agreements are available at Department of Foreign Affairs and Trade, Free Trade Agreements <http://www.dfat.gov.au/trade/ftas.html> at 23 July 2008.
[67] Details on US Free Trade Agreements are available at: Office of the United States Trade Representative, Trade Agreements <http://www.ustr.gov/Trade_Agreements/Section_Index.html> at 23 July 2008.
[68] See Mercurio, above n 45, 220.
[69] See particularly Carlos Maria Correa, 'Implications of Bilateral Free Trade Agreements on Access to Medicines' (2006) 84 Bulletin of the World Health Organisation 399.
[70] Kim Weatherall, a prominent critic of the Agreement describes it as 'breathtakingly long, detailed and opaque' and notes that as a consequence of the IP chapter 'we have lost a lot of flexibility to choose and adjust our own IP policy': see Kimberlee Weatherall, 'Locked In: Australia Gets a Bad Intellectual Property Deal' (2004) 20 Policy 18, 19.
[71] Australia implemented the AUSFTA through the US Free Trade Agreement Implementation Act 2004 (Cth) and the Copyright Legislation Amendment Act 2004 (Cth). Further significant changes to Australian copyright law were made through the Copyright Amendment Act 2006 (Cth). In contrast, the amendments to the Patents Act prescribed in the US Free Trade Agreement Implementation Act 2004 (Cth) were only minor in nature. See US Free Trade Agreement Implementation Act 2004 (Cth) sch 8.
[72] The Agreement entered into force on 1 January 2005. Art 23.4.2 provides that: 'A Party may terminate this Agreement by written notification to the other Party, and such termination shall take effect six months after the date of the notification.'
[73] It is noted in a footnote to the Agreement that: 'With respect to sub-paragraph (a), the Parties recognize that a patent does not necessarily confer market power': see n 17–[23].
[74] It should also be noted that art 17.9.3 of the AUSFTA mirrors art 30 of TRIPS. Hence there would seem to be no further restrictions on domestic provisions relating to experimental use, prior use and regulatory approvals for pharmaceuticals. However, art 17.9.6 of the AUSFTA does add some gloss to the requirements relating to regulatory approvals.
[75] See the discussion below, Part IV.
[76] IPCRC, above n 5, especially 162–3.
[77] Ibid 162; F Michael Scherer, 'Comment' in Robert Anderson and Nancy Gallini (eds), Competition Policy and Intellectual Property Rights in the Knowledge-Based Economy (1998) 104, 106; Nuffield Council on Bioethics, The Ethics of Patenting DNA: A Discussion Paper (2002) 55.
[78] See also Nuffield Council on Bioethics, above n 76, 55. Cf ALRC, above n 14, 614.
[80] The conditions specified by the IPCRC for the grant of a compulsory licence in these circumstances were:
(a) access to the patented invention is required for competition in the (relevant) market;
(b) there is a public interest in enhanced competition in that market;
(c) reasonable requirements for such access have not been met;
(d) the order will have the effect of allowing these reasonable requirements to be better met; and
(e) the order will not compromise the legitimate interests of the patent owner, including that owner's right to share in the return society obtains from the owner's invention, and to benefit from any successive invention, made within the patent term, that relies on the patent.
See ibid 163. Without attempting to draft the conditions that would need to be met, the IPCRC stated that these conditions should be necessarily stringent, and that the expression 'required for competition in the (relevant) market' would 'amount to there being no other option for competition in that market, and that the enhancement of competition that would be secured by the grant would have to be material and substantial': at 163.
[81] Ibid 162.
[82] Ibid 163. Currently applications for compulsory licences must be made to the Federal Court.
[83] The government considered that making a competition test the sole test for application for a compulsory licence would be inappropriate because:
(a) the recommended test may be more stringent in some circumstances than the existing tests and may result in the compulsory licensing provisions ceasing to act as an incentive to negotiate a voluntary licence; and
(b) a competition test will not cover some situations where the non-working of the invention, or other effective denial of reasonable access to it, has some negative effect on the public interest which is not dependant [sic] on competition in the market.
IP Australia, Government Response to Intellectual Property and Competition Review Recommendations, Information Package ('Government Response') <http://www.ipaustralia.gov.au/pdfs/general/response1.PDF> at 12 July 2007.
[84] Ibid.
[85] See ALRC, above n 14, ch 13. Although the ALRC's reference was restricted to the issues surrounding gene patenting, its recommendations have broader implications and are thus generalisable.
[86] Ibid 624–5.
[87] Ibid. Note also that ACIP received a reference to consider the desirability of a more clearly delineated experimental use exemption, and in the course of that inquiry the Council also considered the efficacy of the compulsory licensing provisions. ACIP declined to make specific recommendations in relation to compulsory licensing and considered that the issues in relation to compulsory licensing were deserving of broader review than ACIP was capable of providing under the terms of its current inquiry: ACIP, 'Report on Experimental Use', above n 18, 66.
[88] The new provisions entered into force on 28 September 2006.
[89] See Senate Economics Legislation Committee, Parliament of Australia, Provisions of the Intellectual Property Laws Amendment Bill 2006 (2006) ch 1.
[90] Evidence to Senate Economics Legislation Committee Inquiry into the Intellectual Property Laws Amendment Bill 2006, Parliament of Australia, Canberra, 28 July 2006, pt 5 (Queensland University of Technology). See also IP Australia, IP Australia Responses to Questions on Notice (2006) 7.
[91] Section 46 prohibits the misuse of market power. It provides as follows:
A corporation that has a substantial degree of power in a market shall not take advantage of that power for the purpose of –
(a) eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market;
(b) preventing the entry of a person into that or any other market; or
(c) deterring or preventing a person from engaging in competitive conduct in that or any other market.
[92] Described in the Hilmer Report as 'electricity transmission grids, telecommunication networks, rail tracks, major pipelines, ports and airports': Independent Committee of Inquiry into a National Competition Policy for Australia, National Competition Policy (1993) 240. For consideration of the requirements of Part IIIA see, eg, Brenda Marshall and Rachael Mulheron, 'Declarations of Essential Services Under Part IIIA of the Trade Practices Act: A "Discipline" on Access Reform' (2003) 31 University of Western Australia Law Review 226.
[93] See the definition of 'service' in the Trade Practices Act 1974 (Cth) s 44B.
[94] (2004) 219 CLR 90 ('NT Power').
[95] Ibid 120–2. These comments were made in obiter but nonetheless clearly indicate the High Court's views on the ability to use s 46 to gain access to IP.
[96] Treaty Establishing the European Economic Community, opened for signature 25 March 1957, 298 UNTS 11 (entered into force 1 January 1958).
[97] See, eg, Radio Telefis Eireann and Independent Television Publications Ltd v EC Commission [1995] EUECJ C-241/91P; [1995] 4 CMLR 718 ('Magill'). The European Court of Justice has, to a certain extent, retreated from the liberal position posited in Magill, but it remains clear that art 82 is applicable to compel the licensing of IP: see IMS Health GmbH & Co OHG v NDC Health GmbH & Co KG [2004] EUECJ C41801; [2004] 4 CMLR 28.
[98] Section 46 is broadly modelled on art 82 (formerly art 86) which prohibits the abuse of a position of dominant market power. Although very similar principles of market definition are usually applied in respect of each of these provisions, different market power thresholds are clearly required in respect of each. Unlike s 46, art 82 lists a number of (non-exhaustive) examples of abuse. In this respect, art 82 seeks to regulate specific forms of conduct detrimental to the operation of markets, but s 46 has a broader aim of regulating competitive processes: see especially, Abraham I van Melle, 'Refusals to License Intellectual Property Rights: The Impact of RTE v EC Commission (Magill) on Australian and New Zealand Competition Law' (1997) 25 Australian Business Law Review 4, 22.
[99] See also ALRC, above n 14, 618.
[100] Although it is not clear whether this would include an order for a compulsory licence, the grounds listed (in s 87(2)) are examples and are not exhaustive.
[101] See generally Lawbook Company, Trade Practices Law, vol 2 (at 100) [18.1010]; A V Jennings Ltd v First Provincial Building Society Ltd (1996) 18 ATPR 41–494.
[102] See generally Stephen G Corones, 'Remedies Under the Trade Practices Act for Refusal to Supply' (1993) 10 Australian Bar Review 259.
[104] Queensland University of Technology, above n 89.
[105] Senate Economics Legislation Committee, above n 89, 21 [2.92].
[106] IP Australia, above n 89, 7.
[107] Explanatory Memorandum, Intellectual Property Laws Amendment Bill 2006 (Cth) 45. The Further Explanatory Memorandum contained pages intended to replace particular pages of the original Explanatory Memorandum. Section 15AB of the Acts Interpretation Act 1901 (Cth) gives courts the power to consult extrinsic materials to aid in the interpretation of statutes.
[108] Explanatory Memorandum, Intellectual Property Laws Amendment Bill 2006 (Cth) 45 (emphasis in original).
[109] Patents Act 1990 (Cth) s 133(3)(a).
[110] Patents Act 1990 (Cth) s 133(3)(b).
[111] Patents Act 1990 (Cth) s 133(3).
[112] Patents Act 1990 (Cth) s 133(6).
[114] F M Scherer and David Ross, Industrial Market Structure and Economic Performance (3rd ed, 1990) 660. Scherer and Ross conclude that:
What is needed for rapid technical progress is a subtle blend of competition and monopoly, with more emphasis in general on the former than the latter, and with the role of monopolistic elements diminishing when rich technological opportunities exist.
This would tend to suggest that, in some industries, the promotion of a competitive environment may be warranted in order to realise full innovative potential.
[115] Richard Hoad, 'Compulsory Licensing of Patents: Balancing Innovation and Competition' (2003) 54 Intellectual Property Forum: Journal of the Intellectual Property Society of Australia and New Zealand 28.
[116] Alan Overd and Bill Bishop, 'Essential Facilities: The Rising Tide' (1998) 19 European Competition Law Review 183, 183.
[117] For example in relation to the essential facilities doctrine, see Carrier, above n 7, 784.
[119] See, however, Warren Pengilley, 'Queensland Wire and its Progeny Decisions: How Competent are the Courts to Determine Supply Prices and Trading Conditions?' (1991) 21 University of Western Australia Law Review 225 who is skeptical that courts possess the expertise to be able to make consistent assessments on 'reasonable' supply prices. See also Corones, above n 101, 270–1, who voices similar concerns.
[120] See above Part IIIA.
[121] Patents Act 1990 (Cth) s 133(5)(b).
[122] Although recent amendments led to the insertion into the TPA of pricing principles for Part IIIA access decisions: see s 44ZZCA. This section sets out the principle that prices should be set at a level that is 'at least sufficient to meet … efficient costs of providing access' and that allows 'a return on investment commensurate with the regulatory and commercial risks involved'. In contrast, no such principles exist in respect of access disputes brought under s 46.
[123] Evidence to Senate Economics Legislation Committee, Parliament of Australia, Canberra, 3 August 2006, 7–8 (Stephen Corones).
[124] Ibid. See also Daniel R Cahoy, 'Confronting Myths and Myopia on the Road From Doha' (2007) 42 Georgia Law Review 131, 146–7.
[125] Senate Economics Legislation Committee, above n 89, 18–21.
[126] Hoad, above n 114, 32; van Melle, above n 97, 35; Donna M Gitter, 'The Conflict in the European Community Between Competition Law and Intellectual Property Rights: A Call for Legislative Clarification of the Essential Facilities Doctrine' (2003) 40 American Business Law Journal 217.
[127] Hoad, above n 114, 32; van Melle, above n 97, 35.
[128] See, eg, F M Scherer and Jayashree Watal, 'Post-TRIPS Options for Access to Patented Medicines in Developing Nations' (2002) 5 Journal of International Economic Law 913, 914–24; Carlos M Correa, 'Public Health and Patent Legislation in Developing Countries' (2001) 3 Tulane Journal of Technology and Intellectual Property, 1, 43–7; van Melle, above n 97.
[129] See Scherer and Watal, above n 127
, 916–17; Correa, above n 127
, 44. Note that there may be differences between royalty rates issued in respect of antitrust contraventions and compulsory licences issued on other grounds. In particular, lower royalty rates may be imposed for antitrust violations because as a remedial measure a compulsory licence contains a punitive element. Compensating the patent holder is of lesser concern: Cahoy, above n 123, 169–72.
[130] Frances Hanks and Philip L Williams, 'Implications of the Decision of the High Court in Queensland Wire' [1990] MelbULawRw 4; (1989) 17 Melbourne University Law Review 437, 461.
[131] See, eg, the cases discussed in Pengilley, above n 118.
[132] See, eg, Gitter, above n 125, 226.
[133] Van Melle, above n 97, 35.
[134] Scherer and Watal, above n 127, 920–2. These two methods of measurement are reflected in the patent infringement provisions of US patent legislation.
[135] Ibid 920–4; Correa, above n 127, 44–5. Section 133 of the Patents Act attempts to offset these competing interests by requiring that a 'reasonable' royalty rate be established.
[136] Correa, above n 127, 44.
[137] Valentine Korah, 'No Duty to Licence Independent Repairers to Make Spare Parts: The Renault, Volvo and Bayer & Hennecke Cases' (1988) 10 European Intellectual Property Review 381, 383; Gitter, above n 125, 274.
[138] Scherer and Watal, above n 127, 923–4.
[139] Ibid 920–4.
[140] Ibid 924.
[141] This is discussed further in the next section.
[142] Scherer and Watal, above n 127
, 923. The same can be said of patent misuse decisions; Hanks and Williams, above n 130, 461. As an example see the decision of the European Commission in Radio Telefis Eireann v EC Commission [1991] EUECJ T-69/89; [1991] 4 CMLR 586, 597–8 [14]. This order was not disturbed on appeal by either the Court of First Instance or the European Court of Justice.
[143] Van Melle, above n 97, 38.
[144] Ibid.
[145] Corones, above n 101, 271–3; Pengilley, above n 118, 245; Korah, above n 136, 383; David Wright, Remedies Under the Trade Practices Act (2006) 254–9.
[146] Korah, above n 136, 383.
[147] Both Pengilley and Corones put forward the Prices Surveillance Authority ('PSA') as a body suitably qualified to make pricing decisions, with Corones asserting that the PSA should undertake this role in an administrative capacity and make a recommendation to the court that the court could choose to accept or reject; Corones, above n 101, 271–3; Pengilley, above n 118, 230–1. The PSA has since merged with the Trade Practices Commission ('TPC') to form the Australian Competition and Consumer Commission ('ACCC'). See also Wright, above n 144, 258–9.
[148] Pengilley, above n 118, 245; Wright, above n 144, 258–9.
[149] For example, in Queensland Wire Industries Pty Ltd v The Broken Hill Pty Co Ltd [1989] HCA 6; (1989) 167 CLR 177, the High Court did not indicate whether an order for supply was appropriate, nor set out any principles that would assist the trial Judge, Pincus J, in arriving at a supply price.
[150] (1990) 21 FCR 385; see also ASX Operations Pty Ltd and Another v Pont Data Australia Pty Ltd (No 2) (1991) 27 FCR 492, 505–6.
[151] For a comprehensive analysis see Pengilley, above n 118, 232–5, 243–4.
[152] Pont Data Australia Pty Ltd v ASX Operations Pty Ltd (1990) 21 FCR 385, 425–8.
[153] ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 2) (1991) 27 FCR 492, 505–6. See also ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460.
[154] ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 2) (1991) 27 FCR 492, 505.
[155] See above n 146, and accompanying text.
[156] Wright, above n 144, 258.
[157] It is acknowledged that there may be cases where the parties are so far apart that agreement is extremely unlikely. For example, where a compulsory licence to generically manufacture a drug is sought on humanitarian grounds, the parties are unlikely to agree on what constitutes a reasonable royalty.
[158] Evidence to Senate Economics Legislation Committee, Parliament of Australia, Canberra, 3 August 2006, 8–9 (Stephen Corones).
[159] Ibid 8. Professor Corones acknowledged that the additional ground was probably unnecessary, but considered that it would be useful to have the matter clarified: at 9.
[160] Ibid. The extrinsic material referred to by IP Australia was the Explanatory Memorandum, Intellectual Property Laws Amendment Bill 2006 (Cth) 44-5 [165]-[169] and IPCRC, above n 5, 162–3.
[161] IP Australia, above n 89, 9.
[164] See the Senate Economics Legislation Committee, above n 89, 16 [2.66].
[165] Ibid.
[166] IP Australia, above n 89, 14.
[167] See Stephen G Corones, Competition Law in Australia (4th ed, 2007) 162–3.
[168] However, it should be noted that the government's response to the IPCRC Report was released prior to the AUSFTA, at which time there may have been scope for other interpretations of the reasonable requirements test.
[169] As provided in the Patents Act 1990 (Cth) s 133(3B).
[170] Patents Act 1990 (Cth) s 133(3B).
[171] It should be noted that there are other significant problems with the dependent patent provisions. In particular, the fact that provision is not made for the owner of a dependent patent to apply for a compulsory licence, when an inventor who does not own a patent may, gives rise to an anomaly. Uncertainty over the application of the 'reasonable requirements of the public' test means that this ground is inadequate where the owner of a dependent patent seeks access to an original patent. Cf ALRC, above n 14, 623–4.
[172] Ibid ch 26.
[173] ACIP 'Report on Crown Use', above n 21.
[174] ALRC, above n 14, 599–600.
[175] Ibid 599–605. For discussion of case law relevant to when a body is likely to fall within the definition of the 'Commonwealth or a State', see ibid 596–7; ACIP, 'Report on Crown Use', above n 21, 20–1. ACIP expressed doubt about whether research organisations would fall within the ambit of the definition of 'the Crown': at 21.
[176] Such as the provision of genetic testing services: ALRC, above n 14, Recommendation 26–2, 602–604.
[177] ACIP, 'Report on Crown Use', above n 21, 6.
[178] Ibid 5–9.
[179] Ibid 8.
[180] Ibid 18. ACIP also made some key recommendations with regard to the potential for abuse of the Crown use provisions, particularly: that ministerial approval should be required where invocation of the Crown use provisions is intended; and that standards and processes for remuneration should be amended to provide both the Crown and IP holders with increased certainty. ACIP also recommended that alternative dispute resolution procedures be put in place to assist parties in reaching agreement in relation to remuneration. See Recommendations 2.2, 3.1 and 3.2.
[181] Ibid 19.
[182] Ibid; see particularly at 2.
[183] Recall, however, that the AUSTFA does not permit the transfer of associated know-how related to a patented invention, so that exploitation of a patented invention may be difficult even in the event the Crown use provisions are able to be utilised; see above, Part IIB.
[184] Mark Vaile, 'Vaile Welcomes Breakthrough on Access to Medicines' (Press Release, 31 August 2003) <http://www.trademinister.gov.au/releases/2003/mvt067_03.html> at 28 July 2008.
[185] AusAID, Meeting the Challenge: Australia's International HIV/AIDS Strategy (2004) 18.
[186] Joint Standing Committee on Treaties, Parliament of Australia, Report 86: Review into Treaties Tabled on 27 March and 9 May 2007 (2007) ch 9, Recommendation 8.
[187] WTO, Members Accepting Amendment of the TRIPS Agreement (2008) <http://www.wto.org/english/tratop_e/trips_e/amendment_e.htm> at 23 July 2008.
[188] On this point, see European Parliament, Resolution on the TRIPS Agreement and Access to Medicines, EU Doc B6-0288/2007 (2007).