On your marks

Earlier this year we released an update explaining the impacts of the repeal of subsection 51(3) of the Competition and Consumer Act 2010 (Cth)(CCA) on IP owners. The provision previously exempted IP owners from the anti-competitive conduct prohibitions for particular conduct relating to IP rights. With the repeal of subsection 51(3), conduct involving IP rights will now be subject to the anti-competitive conduct prohibitions.

Get set

On 21 June 2019, the Australian Competition and Consumer Commission (ACCC) published a set of draft guidelines, which explain how the ACCC will approach enforcement of the CCA after the repeal takes effect on 13 September 2019. The Guidelines are intended to support IP rights holders and legal and business advisers during the transition to the new framework.

According to the Guidelines, the ACCC will be guided by the following principles when enforcing the new regime:

  • IP rights do not always create substantial market power;
  • licensing or assignment of IP rights usually encourages competition; and
  • licensing or assignment may have anti-competitive consequences.

Helpfully, the Guidelines provide examples of how the anti-competitive conduct prohibitions will apply to IP related conduct, including for:

  • cartel conduct (including market sharing, price restrictions and output restrictions);
  • contracts, arrangements, understandings and concerted practices (including time restrictions, grant-back provisions and output restrictions); and
  • exclusive dealing (including third line forcing).

The ACCC will continue to focus enforcement on matters that have or have the potential to harm the competitive process or those that may cause widespread consumer detriment.

The Guidelines also cover:

  • the factors that ACCC will consider to approve a certification trade mark (mark indicating that a product meets a particular standard or quality);
  • the process to seek authorisation from the ACCC if businesses are concerned that proposed conduct may contravene prohibitions;
  • the alternative process of notification;
  • the ACCC's power to issue class exemptions for kinds of conduct; and
  • the sanctions in the CCA.

The ACCC will publish a final set of guidelines before the subsection is repealed on 13 September 2019.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.