Grant Chapman (SA, Liberal Party) Share this | Hansard source

The Intellectual Property Laws Amendment Bill 2006 implements a suite of amendments to Australia’s intellectual property system as recommended by two independent reports—one from the Intellectual Property and Competition Review Committee, known simply as the Ergas report, and the other from the Advisory Council on Intellectual Property. In addition, a set of amendments to the Patents Act 1990, the Trade Marks Act 1995, the Plant Breeder’s Rights Act 1994 and the Olympic Insignia Protection Act 1987 will further fulfil the expectation of the two reports that Australia formulate a succinct intellectual property law that is able to balance the rights of competitors with enforcing the right of innovators over their patents.

An important change will be to the Patents Act 1990. This will see a broadening of the capacity of Australian generic pharmaceutical companies to undertake more comprehensive springboarding activities. This important amendment will provide many benefits to Australia through a more internationally competitive pharmaceutical industry and an increased self-sufficiency of Australia’s medicines industry. Springboarding is a term that refers to using the subject matter of a patent to collect the data required to obtain regulatory approval of a generic version of a patented drug when the patent is still in force. Since the introduction of the Intellectual Property Laws Amendment Act in 1988, in Australia springboarding has only been permissible once a patent has had its term expended.

Only once a patent reaches this stage can pharmaceutical companies begin research and preparation to undertake the production of generic medicines and substitutes. This has held back the potential of our businesses to compete in the international market with overseas competitors who are allowed to undertake springboarding from the commencement of the patent provided that it is for research purposes only and in accordance with World Trade Organisation regulations. This bill addresses the current Australian competitive disadvantage by providing our generic pharmaceutical companies with the capacity to undertake springboarding from the time a patent is initially introduced. This amendment will bring Australian legislation into line with that of America and the European Union on springboarding thereby providing a more competitive and sustainable Australian generic pharmaceuticals industry. Clearly the introduction of this piece of legislation will bring a range of benefits to the Australian economy by providing more incentive for generic pharmaceutical companies to remain in Australia.

The importance of Australia’s pharmaceutical industry cannot be underestimated. Its economic role and the role it plays in national security are both essential. The generic companies make up a third of the pharmaceutical industry export trade and contribute to our economy through strong investment and providing highly skilled employment. This legislation is necessary to ensure these companies do not withdraw their operations from Australia. It provides them with an equal platform to match it with their international competitors. In addition, the broadening of our springboarding laws will encourage generic pharmaceutical development in Australia. This will ensure that in times of national crisis we have an effective regime of pharmaceutical research that will be able to satisfy the needs of all Australians. This expectation that the industry remain sustainable is a responsibility outlined in the national medicines policy, which exemplifies the government stance on developing intelligent policy on patented products within the pharmaceutical industry.

The Senate economics committee—of which I am a member and to which Senator Murray referred—examined the bill and reported on 17 August. The committee recommended that the government pass the legislation but with a couple of qualifications: firstly, that the government consider initiating an interdepartmental committee to consider whether springboarding provisions should be extended to other industries, and in particular to agricultural chemicals. It is pleasing that the government has responded favourably to this recommendation. This week the Parliamentary Secretary to the Minister for Industry, Tourism and Resources, the Hon. Bob Baldwin MP, responded that IP Australia has initiated an interdepartmental committee to formulate the government’s response to the report of the Advisory Council on Intellectual Property entitled Patents and experimental use. The issue of springboarding was raised by Nufarm Ltd in a submission to this Advisory Council on Intellectual Property inquiry, as it was in their submission to the Senate economics committee. Through the interdepartmental committee, IP Australia has recently released a consultation paper which will gather a wider range of views concerning issues from affected industries.

Another recommendation of the Senate committee was that the government reconsider schedule 8 to the bill in order to clarify the relationship between the patent-licensing provisions of the bill and the Trade Practices Act 1974 in light of the concerns raised with the committee by Professor Corones and Mr Clapperton. Again, Mr Baldwin has advised this week that officers of IP Australia have held discussions with Professor Corones to consider this issue in more depth. In those discussions it has been agreed that amendments to the bill are not necessary but a further explanatory memorandum should be tabled to provide greater clarity around this issue. This further explanatory memorandum clarifies that the provision to be inserted in the Patents Act is intended to complement the remedies available under the Trade Practices Act and is not intended to limit the court’s powers under the Trade Practices Act. It also clarifies that a compulsory licence for a patent is available as a remedy under the Patents Act 1990 for any breach of part IV of the Trade Practices Act in addition to any other remedies that are currently available under the Trade Practices Act. As a result, a party affected by a patent holder’s anticompetitive conduct will have a great number of options—either seeking any of the remedies that are currently available under the Trade Practices Act or seeking the remedy of a compulsory licence under the Patents Act.

The government’s positive response to the work of the economics committee again highlights the willingness of the Howard government to consult widely with interested parties on issues before the parliament and also reinforces the value of the work of legislation committees in the Senate.

Legislation that honours our international obligations, especially on such an internationally sensitive issue as intellectual property law, is also important. Australia is a signatory to the World Trade Organisation Agreement on Trade Related Aspects of Intellectual Property Rights, generally known as TRIPS. This agreement does not allow generic pharmaceutical companies to manufacture, stockpile for later sale or export quantities of pharmaceuticals while patents are still in place. This legislation is an appropriate step towards honouring this agreement while remaining sensible about our right to research and develop a sustainable pharmaceutical industry which is able to satisfy our needs. This piece of legislation will keep important knowledge companies in Australia, employing young Australians to undertake research work of the highest strategic importance, whilst not violating our international commitments.

This bill is also an example of the effective ways in which we can balance the rights of the innovator with the expectations of the community to receive the benefits of innovation through competition. It was found by the Ergas report that, although intellectual property law and competition policy were more often than not complementary, as they recognised in recommendation 15:

While conferring intellectual property rights encourages investment in creative effort, it can allow the owners of the results of this effort to unduly restrict the diffusion and use of these results.

The potential for anticompetitive behaviour following patenting requires that we have legislation in place that provides adequate rights and entitlements for all parties involved. This has been satisfied in the bill through a competition test to be undertaken between parties at the Federal Court if it is believed that one who owns their patent is not fully utilising it for the benefit of the broader community or is using it for anticompetitive purposes such as stifling further innovation.

Schedule 6 includes the provision that if one is deemed by the trademarks office to have satisfied the requirements of being a prior user of the patent then they will not be licensed to continue their work but instead assigned that right, provided that they undertake it themselves within Australia. This legislation is effective in its provision for parties who have a genuine claim to prior use recognition. It gives them the potential to continue their work throughout the life of the patent whilst also providing to strategic industries, such as the generic pharmaceutical industry, the concession to research and therefore remain competitive in their industry. This upholds the recommendations of the Ergas report by ensuring a balance between the innovator and their competitors.

In addition, as was recommended by the Advisory Council on Intellectual Property report, intellectual property will now have more effective mechanisms of enforcement to ensure the rights of innovators are respected. The bill provides in schedule 8 that the trademarks office will be able to revoke trademarks due to administrative error or oversight. In addition, schedule 5 outlines that the judicial system, through the Federal Court, will have the capacity to order punitive damages in addition to financial recuperation against those who are in violation of patent law. These considerations made for the rights of the innovator will, however, be regulated by the introduction of further competition tests to ensure patents are being fully utilised as decided by the Federal Court.

Therefore the intellectual property bill that is currently before the Senate is an important piece of legislation that will improve our national health by securing a sustained pharmaceutical industry that can fulfil our requirements in times of emergency and that is also capable of raising investment, employment and training opportunities as well as providing other important reforms with regard to intellectual property. However, it also achieves this while still sensibly balancing the rights of innovators and competitors in a succinct way which will improve the benefits of intellectual property law for all Australians. Therefore I commend it to the Senate, as was recommended by the Senate economics committee.