19 January 2014

IP Australia Consults (This Time) On Further IP Law Amendments

[Update: This post was updated on 21 January 2014 in response to a clarification that I received from IP Australia.  The intention of the bill remains that Australia would extend the benefits of the TRIPS compulsory licensing provisions, for manufacture and export of generic pharmaceuticals to least developed countries, beyond the minimum requirements, so as to encompass non-WTO member countries.]

IP Australia has released an ‘exposure draft’ of a proposed Intellectual Property Amendment Bill 2014, and is inviting interested parties to make written submissions on the draft bill and associated draft explanatory memorandum by 7 February 2014.

The draft bill is a revised version of the Intellectual Property Laws Amendment Bill 2013, which narrowly missed out on being passed in the Senate (after having made it through the House of Representatives) when a Federal Election was called on 4 August 2013.  Among other things, the draft bill includes new provisions required for the implementation of a single patent application and examination process for Australia and New Zealand, amendments to enable the implementation of a single regulatory regime for patent and trade marks attorneys in Australia and New Zealand, and 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.

Unlike the earlier Raising the Bar reforms, which passed through both houses of parliament in 2012 with bipartisan support, the 2013 bill passed only by a narrow majority in the House of Representatives, with the then opposition (now government) conservative Liberal National Party (LNP) coalition voicing strong objections to two aspects of the legislation, namely:
  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; and
  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.
At the time I wrote (quite rightly, as it turns out):

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.

The new 2014 exposure draft retains all of the Raising the Bar corrections and Single Economic Market (SEM) reforms with only minor amendments, deletes the Crown Use amendments, and makes some substantive changes to the TRIPS provisions.  I have prepared a marked-up copy showing the differences between the 2013 Bill which passed in the House of Representatives, and the current exposure draft.

Impact of Conservative Opposition

The objections to the Crown Use amendments from the conservative side of politics were principally based on a claim that they would result in a breach of Australia’s obligations under the US-Australia Free Trade Agreement (FTA).  I do not doubt that the US would oppose provisions extending the power of the Australian Government to grant itself a right to use patented technology, and from a philosophical perspective anything which enhances the power of government to interfere in private commercial arrangements is (at least ‘officially’) contrary to the conservative viewpoint.

With regard to the TRIPS provisions, Australia has an as-yet unfulfilled treaty obligation which arose under the previous conservative government of John Howard, so the LNP coalition could hardly now object in principle to the implementation of that obligation.  Their main concern last year was that the proposed legislation went beyond what was required under TRIPS, by extending benefits to non-members of the World Trade Organization (WTO).  They were also concerned about the provisions for ‘ancillary compulsory licences’, which I had also found somewhat confusing.

When I spoke with the Commissioner of Patents, Fatima Beattie, last August, I asked her about this opposition to the Crown Use and TRIPS reforms.  She responded that:

…sometimes policy initiatives need to be progressed much more quickly than the general stakeholders might wish. I think that there was consultation. Sometimes consultation, if it doesn’t take on board everything that people say, is not seen as being good consultation, but it’s consultation nonetheless because we’ve gone out there, we’ve got the views, we have listened to them, but we may not agree with those views necessarily in going forward, so I think that might be the difference on this occasion.

In other words, when a government which was happy with the proposed amendments controlled both houses of parliament, it was OK to set aside objections from the other side of politics.  Now that the LNP is in government, however, there is no prospect that the legislation will pass if these concerns are not addressed.

Changes in 2014 Exposure Draft

Unsurprisingly, the main changes in the new exposure draft, as compared with the 2013 Bill, are:
  1. deletion of the Crown Use amendments;
  2. deletion of the confusing and (apparently) controversial provisions relating to ancillary compulsory licences and cross-licences;
  3. deletion of the express inclusion of non-WTO countries as beneficiaries (‘eligible importing countries’) under the TRIPS provisions, and replacement with a reference to ‘a foreign country of a kind prescribed by regulation’; and
  4. the insertion of some additional headings, and ‘simplified outline’ boxes – perhaps to assist parliamentarians in properly understanding the scope and purpose of the amendments.
Transfer of the specification of ‘eligible importing countries’ to the Regulations strikes me as a clever move.  IP Australia’s Consultation Paper promotes this change (along with a new subsection 228(5)) as simplifying the mechanism for identifying eligible countries, given that membership of the WTO, and countries classified as ‘least developed countries’ (LDCs), are subject to change from time to time.  The amendments mean that such changes will not require amendments to either the Act or Regulations.

However, moving the provisions defining ‘eligible importing countries’ to the Regulations also means that if any future government wanted to extend the scope of the provisions beyond the minimum required by TRIPS, it would be able to do so by amending the Regulations.  It would not be necessary to make the change via a new Act of Parliament.

IP Australia has indicated that it is still the intention of the bill to extend the range of ‘eligible importing countries’ beyond the minimum TRIPS requirement, on humanitarian grounds.  The final outcome will, however, be subject to the current consultation process, and issues raised in the course of parliamentary debate on the bill.

Short Consultation Period?

It is nice that IP Australia is consulting publicly on the draft, however a period of only three weeks (until 7 February 2014) seems a little miserly.

My guess is that they are looking to finalise the bill and get it through both houses of parliament before the Senate changes composition mid-year.  Obviously the bill will need the support of the government in the lower house, and the changes from the 2013 version are clearly intended to achieve this.  Currently the balance of power in the Senate is held by Labor and the Greens, who can both presumably be expected to support the bill, even in its watered-down form.  However, the new Senate will contain a number of independent and single-issue party members, who will together hold the balance of power, and whose views on obscure aspects of IP law are entirely unpredictable.

Conclusion – Now It’s Your Turn!

As noted already, formal submissions commenting on the exposure draft are due by 7 February 2014, and should be sent to consultation@ipaustralia.gov.au.

Informal submissions are welcome in the comments below.

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