Filipe Frazao /
21 May 2015Asia-Pacific

IP in Australia: major changes in store

Just two years after one of the biggest ever shake-ups to Australian patent law—the Raising the Bar Act of 2012—further change is in store for pharmaceutical and biotechnology companies operating in Australasia.

On February 9 this year, the Australian parliament passed into law the Intellectual Property Laws Amendment Bill 2014. The act received Royal Assent on February 25.

The act makes five major amendments, four of which will affect life sciences businesses based in Australia.

First, it implements the WTO TRIPS Protocol, which allows Australian drug companies to make and export patented medicines to countries experiencing public health emergencies under a compulsory licence issued by the Federal Court of Australia.

Another part of the act ensures that the Patents Act correctly refers to the TRIPS Agreement as it stands since it was amended by the protocol in 2005.

The act also streamlines the patent application and examination processes in Australia and New Zealand, as part of the countries’ Single Economic Market agenda, and will allow plant breeders to defend their IP rights at Australia’s Federal Circuit Court.

Before the main changes come into effect on August 25, LSIPR asks what problems the act will address, and how will it help innovator drug companies in Australia, New Zealand and beyond.

Crossing the Tasman Sea

In 2009, the then Australian and New Zealand Prime Ministers, Kevin Rudd and John Key, agreed to strengthen business relationships between their countries in part by setting out a suite of IP initiatives under the Single Economic Market agenda.

The agenda is aimed at removing regulatory barriers to companies in Australia and New Zealand, and at streamlining business transactions between the countries. The amendment act puts the agenda into action.

Virginia Beniac-Brooks, a partner at the Melbourne office of IP firm Marks & Clerk, says that the single application and examination process will give pharma and biotech companies a more cost-effective way of registering patents in both countries.

A single examiner will examine the patent applications for the same invention, taking into account separate national laws. After examination, two separate patents will be issued, one for Australia, one for New Zealand, which if successful, can be enforced in both jurisdictions.

A bilateral agreement will also give Australian and New Zealand patent attorneys the right to practise in both countries.

Monique Nicolle, an associate at law firm Baker & McKenzie in Sydney, said that patent prosecution processes in Australia and New Zealand have been widely considered as “time-consuming, costly and burdensome”, and that plans to simplify and streamline the processes and reduce the costs associated with them have been on the agenda for many years.

This part of the act will be implemented before February 25, 2017.

Prepared for crisis

As mentioned, the act also implements the TRIPS Protocol. The protocol lets Australian pharmaceutical companies apply to the federal court for compulsory licences to make generic versions of patented drugs and send them to low-income countries experiencing health emergencies, or to issue voluntary licences to generic drug makers.

If the patent owner is unwilling to issue a voluntary licence, the protocol provides a mechanism that forces the patent owner to issue a compulsory licence.

“The single application and examination process will give pharma and biotech companies a more cost-effective way of registering patents in both countries.”

Richard Hoad, a partner at law firm Clayton Utz in Melbourne, said that this change to the IP act would provide certainty about whether, and how, Australia would implement the protocol.

He says: “It’s more a case of innovators being aware that this new ground for the grant of a compulsory licence exists, and taking that into account if anyone seeks a licence to manufacture for export to developing countries.”

The amendment to the TRIPS Agreement took place nearly ten years ago, in December 2005, and there are now 40 countries and territories that have similar provisions that allow for the export of medicines, including the EU, China, and India.

Why did it take so long for the protocol to be enacted in Australia?

Hoad says it can take a while for international conventions relating to IP to find their way into Australian domestic law.

Australia’s Department of Foreign Affairs and Trade started consulting with the public and government agencies about accepting the protocol in 2006. In 2007, the Joint Standing Committee on Treaties (JSCOT) started an inquiry into Australia’s accepting the protocol, and eventually recommended that it be adopted into national law.

In September 2007, the government accepted JSCOT’s recommendation and Australia accepted the terms of the protocol. Soon after, Kevin Rudd was elected as prime minister of Australia for the first time.

“It may be relevant that we had a change of government in Australia in December 2007, and a fairly eventful period in Australian politics followed,” Hoad notes.

“In those heady times, IP law was probably not at the top of everyone’s agenda.”

Beniac-Brooks adds: “Any delay in the implementation of the TRIPS Protocol is not because of any reluctance on the part of Australia to honour its obligations under the TRIPS Agreement.

“Rather, the implementation involved the need for the government to undertake a detailed review of the compulsory licence provisions. The TRIPS Protocol has provided the Australian government with the opportunity to revise the provisions to ensure that Australia’s role as a ‘good international citizen’ is evenly balanced with its obligation to ensure that patent holders are not disadvantaged.”

Accordingly, patent owners that make their patented drugs available to countries in a time of crisis will be adequately compensated.

A new forum

The act also amends the Plant Breeders Rights Act 1994 to let plant breeders defend their IP rights in the federal circuit court.

When the court was first established, it largely took over the functions of the former Federal Magistrates Court. It hears less complex disputes on federal law matters, relieving the workload on the federal court and the Family Court of Australia.

Hoad says that there is little litigation over plant breeders’ rights in Australia—cases that were brought to the federal court before—but this amendment means that they will be heard in a more appropriate forum.

“These cases are typically less complex than much of the litigation that is conducted in the federal court, and often involve litigants with more modest financial resources,” he says.

Those litigants would include farmers and small businesses with limited resources, Nicolle adds.

There are just a few months to go until the amendments are due to be fully implemented in Australia, although before any amendments governing the Single Economic Market can take effect, New Zealand needs to get on board.

“While Australia has now enacted the necessary legislative amendments to the Patents Act 1990 (Cth), before any changes can be practically implemented, amendments are also required to supporting regulations, and equivalent legislative changes must be introduced to New Zealand’s patent legislation,” says Nicolle.

According to an article by IP firm Shelston IP, the New Zealand parliament is due to consider the legislation later this year.

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