Election Stalls Further Patent Law Reform in Australia

On 4 August 2013, Australia’s Prime Minister, @KRuddMP (a.k.a. Kevin Rudd) announced that the country would go to the polls to elect a new Federal Government on 7 September 2013.  When that happened, the current government went into ‘caretaker mode’ (meaning that it cannot make any significant decisions without consulting the opposition), and all existing parliamentary business was suspended.

One consequence of this is that all legislation which has been introduced, but not yet passed in both houses of parliament, has lapsed, and will need to start the process all over again in the next parliament.  This is particularly unfortunate news for the Intellectual Property Laws Amendment Bill 2013, which was introduced in the House of Representatives on 30 May 2013, passed without amendment on 25 June 2013, and moved rapidly to the Senate, where it received its first and second readings (again without amendment) on 28 June 2013.  I can only suppose that had the Senate sat for even one more day before the election was called, the Bill would have passed.

The Bill was a bit of a grab-bag of both substantial and trivial amendments to the Patents Act 1990, along with a few minor amendments to the Trade Marks Act 1995, the Designs Act 2003, and the Plant Breeders Rights Act 1994.  The amendments affecting the Patents Act included:

1. amendments to the Crown use provisions of the Act, to implement recommendations made in the Productivity Commission Inquiry Report into Compulsory Licensing of Patents;
2. introduction of new compulsory licensing provisions, implementing Australia’s obligations under the TRIPS Protocol to enable pharmaceutical manufacturers to apply to the Federal Court for a compulsory licence to manufacture generic versions of patented medicines to export to developing countries, based on draft legislation which was released for consultation in August 2012;
3. new provisions required for the implementation of a single patent application and examination process for Australia and New Zealand;
4. amendments to enable the implementation of a single regulatory regime for patent and trade marks attorneys in Australia and New Zealand; and
5. some further minor amendments to repeal unnecessary document retention provisions, and correct some oversights in the Intellectual Property Laws Amendment (Raising the Bar) Act 2012.

To complicate matters further, the first two of these reforms (i.e. Crown use and the TRIPS compulsory licensing implementation) did not receive bipartisan support in the House of Representatives, being described by the opposition Member for Indi, Mrs Sophie Mirabella, as being ‘fine’ in basic intent, but poorly conceived and drafted, and ‘simply not ready for introduction into the parliament’.

What Next for These Reforms?

It seems to me that there were three distinct classes of amendment in the lapsed bill.

First, amendments to repeal unwieldy and outdated document retention provisions, and to correct oversights in the Raising the Bar Act would not appear to be associated with any substantive policy considerations.  It is difficult to imagine that there could be any objection to these amendments from either side of politics.

Second, amendments related to the implementation of single examination and trans-Tasman regulation of the patent and trade marks attorney professions are associated with the Single Economic Market (SEM) initiative, which was agreed between Australia and New Zealand in 2009, i.e. under the current Labor government.  It has since been substantially advanced, however whether an alternative government would continue the commitment is unclear.  There were, however, no objections to these aspects of the Bill from the opposition in the House of Representatives.

Third, the objections from the opposition during the debate in the House of Representatives suggest that the provisions relating to Crown use and compulsory licenses are contentious, and would have difficulty passing through parliament if there were a shift in the balance of power.

Many people consider a return to power of the current government at this election to be unlikely.  I would therefore not be at all surprised to see the various components of the lapsed Intellectual Property Laws Amendment Bill divided into separate legislation before introduction into the next parliament.

So What’s the Controversy About?

To be honest, I do not fully understand why the opposition took such strong objection to the compulsory licensing and Crown use provisions in the bill – except that it provided another opportunity, in the lead-up to an election (then thought to be due in September) to rehash, on the parliamentary record, a number of earlier government ‘missteps’.

For example, Mrs Mirabella suggested, in her second reading speech, that the proposed Crown use provisions would somehow result in a breach of Australia’s obligations under the Australia-US Free Trade Agreement (FTA).  Whatever those obligations may be, however, my understanding of the proposed amendments is that they would serve largely to clarify, rather than extend, the scope of pre-existing Crown use provisions.  In this sense, the objections would appear to reflect a lack of understanding of the current Crown use provisions, more than a criticism of the provisions in the Amendment Bill.

Regarding the compulsory licensing provisions, the main objection appeared to be that the amendments went beyond what was required for compliance with the TRIPS Protocol.  Australia’s obligation is to permit the manufacture and export of generic medicines to developing nations in cases of particular need, if the country in question is a member of the World Trade Organization (WTO) which has registered its intention to import the patented drugs.  The provisions in the Amendment Bill did not, however, limit the benefit of the new compulsory licensing provisions to WTO members, or to nations which have registered their intentions.

Reasonable and compassionate members of the Australian public (myself included, I should say) might conclude that we are a sufficiently fortunate and prosperous country that we can afford to be a little more generous, and go beyond the bare minimum required of us under our treaty obligations.  The current opposition, it seems, was more concerned with the fact that the limitation to WTO members is, apparently, designed to provide a clear incentive for non-members to join the organisation.

The opposition was also concerned about the provisions for ancillary compulsory licences and cross-licences.  As I wrote when the exposure draft of the legislation was released, I thought that these provisions seemed a bit confusing, but it did not seem that they were particularly objectionable in terms of what they were intended to achieve.

Conclusion

Once the election is over, and a government has been formed, I would expect to see at least some of the provisions of the Intellectual Property Laws Amendment Bill reintroduced to parliament.

Now that the Raising the Bar reforms are all in operation, correcting the known issues and oversights in that earlier legislation should be a reasonably high priority.  And unless the next government wants to abandon the Trans-Tasman Single Economic Market program, it seems likely that the single filing and examination process and the single regulatory regime reforms will be reintroduced sooner rather than later.

It may, however, be back to the drawing board for the Crown use and TRIPS compulsory licensing provisions.

Tags: Australia, Compulsory license, Crown use, Law reform, Legislation, New Zealand, Patent attorney profession, Politics