Focus: Productivity Commission review - intellectual property
Services: Intellectual Property & Technology

The Australian Government announced last week that it has requested an expansive inquiry into Australia's intellectual property (IP) system by the Productivity Commission (Commission). 1

The inquiry fulfils one of the recommendations of the Competition Policy Review (Harper Review), that the Australian Government tasks the Commission with an "overarching review" of Australia's IP system. The broad purpose of the inquiry is to examine whether the IP system appropriately encourages and incentivises innovation and investment, while not impeding innovation, competition, investment and access to goods and services.

What will the inquiry involve?

Under the inquiry's terms of reference, the Commission has been asked to examine the effect of Australia's IP system on research and innovation, access to and cost of goods and services, and competition, trade, investment and consumer welfare. The Commission has also been asked to recommend changes to the current IP system which improve the overall wellbeing of Australian society, and to propose changes which:

  • encourage investment and innovation by individuals and businesses
  • allow access to an increased range of quality goods and services
  • give individuals and businesses greater certainty as to whether they are likely to infringe the IP of others, and
  • reduce costs of compliance with IP rules, including administrative costs.

The Commission will undertake the inquiry and propose changes in light of several considerations, including Australia's obligations under international trade agreements, the need to retain incentives for innovation and investment, and the consequences of changing the existing IP system on Australia's economy, trade and competition.

The Commission will also have regard to the findings and recommendations of the Harper Review, as well as the review of the innovation patent system undertaken by the Advisory Council on Intellectual Property (ACIP). The final report of the Harper Review stressed the need for Australia's IP policy to strike a balance between the encouragement of widespread adoption of new techniques, processes and systems, and the encouragement of ideas and innovation, noting that "excessive IP protection can not only discourage adoption of new technologies but also stifle innovation". 2 The Harper Review also recommended the repeal of section 51(3) of the Competition and Consumer Act 2010 (Cth) (the Act), which exempts certain types of transactions involving IP from competition law prohibitions under the Act. 3

ACIP's final report on its review of the innovation patent system was recently updated to reflect new findings on the use of the innovation patent system by small to medium enterprises (SMEs). It issued a statement in May recommending that the Government consider abolishing the innovation patent system, because of its view that the system was not achieving its objective of stimulating innovation amongst SMEs.

The somewhat controversial recommendations of both ACIP and the Harper Review will be key issues for consideration by the Commission's inquiry, which could have a significant impact on, and far-reaching implications for, Australia's existing IP system.

Next steps

As part of the inquiry, the Commission will undertake a public consultation process which will involve the release of an issues report and an invitation for public submissions at a later date (to be advised). The inquiry will run for 12 months, with a final report expected to be handed to the Australian Government in August 2016.

Footnotes

1The Treasury, Media Release ("Productivity Commission inquiry into Australia's intellectual property arrangements"), 18 August 2015, available at: http://jbh.ministers.treasury.gov.au/media-release/073-2015/.
2Competition Policy Review, Final Report, p. 40 (available at:
http://competitionpolicyreview.gov.au/final-report/).
3Competition Policy Review, Final Report, p. 42 (available at: http://competitionpolicyreview.gov.au/final-report/).

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