Monsanto Co. was recently awarded one billion dollars for The DuPont Co.'s infringing use of Monsanto's GM patent. DuPont was found to have infringed the patent during the development of its yet to be released Optimum GAT soybean line. Such a win in Australia would be unlikely under the new research exemption passed in the recent Raising the Bar Amendment to the Patents Act. This may make Australia a more appealing place for companies to perform product development where development may be at risk of infringing a patent.

Monsanto developed genetically modified (GM) seeds which conferred resistance to the Roundup (glyphosate) herbicide. The GM technology is patented with the US patent due to expire in 2014. DuPont started developing genetically modified soybeans. During research and development, DuPont used Monsanto's GM technology. Whilst no commercial product has yet been released on the market, Monsanto successfully argued that this unlicensed use was an infringing use, and was not protected by any research exemption under US law.

In April 2012, Australia passed the Raising the Bar Bill which, amongst other things, introduced a broad research exemption to patent infringement. If DuPont was now to perform such development work in Australia, then it is likely that such work would be exempt from infringement. The new research exemption is quite broad, and covers a wide range of otherwise infringing acts if they are conducted for experimental purposes. This includes:

  • improving or modifying the invention;
  • determining the properties of the invention;
  • determining the scope of a patent claim or the validity of patent for an invention; and
  • determining whether doing an act would infringe a patent.

Whilst the exemption is yet to be judicially considered, the Government's explanatory documents make it clear that the intention is that the exemption will apply to acts performed for the predominant purpose of gaining new knowledge. This includes trying to improve a patented product even if the ultimate aim is to commercialise the improved result.

The amended research exemption appears to be stronger than the equivalent provisions available in the US, and this may make Australia an appealing place to perform research and development work.

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