WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
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Bill.
CONTENTS
Intellectual Property Laws Amendment Bill
1997
Date Introduced: 26 November 1997
House: House of Representatives
Portfolio: Industry, Science & Tourism
Commencement: Upon Royal Assent with the exception
of:
Schedules 1 & 2 - which commence on a day fixed by
Proclamation or 6 months after this Act receives Royal Assent.
Schedule 3 - as specified.
To extend patent protection on certain pharmaceutical products
and to introduce a new regime for regulating patent attorneys and
trade mark attorneys.
Intellectual property(1) is 'a generic term for the various
rights or bundles of rights which the law accords for the
protection of creative effort - or, more especially, for the
protection of economic investment in creative effort.'(2)
Intellectual property law had its origins centuries ago.For
example,the first enactment to protect one form of intellectual
property, namely copyright, was the British Statute of Anne of
1709.(3) Since then much of the UK law (and hence the
Australian law) relating to intellectual property developed from
the Patents, Designs and Trade Marks Act 1883 (UK).
The Australian Industrial Property Organisation (AIPO) is the
federal body that regulates trademarks, designs and patents.The
difference between the three types of property rights covered by
the bill, patents, trade marks and designs is that:
- Patents are granted for discoveries and inventions, and give
the patent owner a temporary monopoly to exploit the discovery or
invention and to authorise others to exploit them;
- Trade marks are unique identifying marks that link the owner
with, and thereby identify the source or origin of, the particular
goods or services provided. Registration of a trade mark gives the
owner the exclusive right to use that mark on those goods or
services for which it is registered; and
- Designs are the identifying features of shape, configuration,
pattern or ornamentation which can be judged by the eye in a
finished article.Design registration gives the owner the exclusive
rights to make, use and sell articles incorporating the registered
design.
Applications for registering intellectual property rights are
made to AIPO which is a 'fully cost-recovered division of the
department' of Industry, Science & Tourism.AIPO incorporates
the Patents Office, Trade Marks Office and Designs Office.(4) The
1995-96 Annual Report notes that:
Total patent applications grew by 10 per cent to 39 843, designs
were up by 1.5 per cent to 4 384, and trade marks were up by nearly
7.5 per cent to 34 166.(5)
Constitutional Provisions
Section 51(xviii) of the Constitution gives the Commonwealth
Parliament legislative power to make laws with respect to some
forms of intellectual property:
Copyrights, patents of inventions and designs, and trade
marks
However, intellectual property law has expanded somewhat since
the Constitution was drafted and many of the newer forms of
intellectual property (see below) are not directly covered by those
words.Regimes that do not fall within the above power may still
fall within the scope of the external affairs power and therefore
be within the Commonwealth Parliament's legislative power.
Relevant International Treaties
There are a number of international instruments that deal with
intellectual property.One that is relevant to this bill is the 1967
Convention Establishing the World Intellectual Property
Organization [WIPO].Australia acceded to WIPO on 10 May 1972
and WIPO entered into force for Australia on 10 August 1972.Article
2 defines intellectual property in the following manner:
(viii) 'intellectual property' shall include the rights relating
to:
- literary, artistic and scientific works,
- performances of performing artists, phonograms, and
broadcasts,
- inventions in all fields of human endeavour,
- scientific discoveries,
- industrial designs,
- trademarks, service marks, and commercial names and
designations,
- protection against unfair competition,
and all other rights resulting from intellectual activity in the
industrial, scientific, literary or artistic fields.
Australian legislation does not protect all of the above
'rights'.For example, scientific discoveries, once published are
not eligible for protection.(6)
The more recent Trade Related Aspects of Intellectual Property
(TRIPS) Agreement does cover many aspects of intellectual property
but does not attempt a comprehensive definition of the term.(7)
TRIPS aims to tighten protection of intellectual property by
ensuring widespread mechanisms for the protection of intellectual
property rights whilst aiming not to unduly impede international
trade.
Relevant Australian and New Zealand Case Law
The Bill, among other things, will extend the patent protection
on certain pharmaceutical products.The courts have discussed the
arguments for and against this and have found both humanitarian and
economic grounds for allowing such patents.
In the case of Anaesthetic Supplies Pty Ltd v
Rescare Ltd 122 ALR 141 the Federal Court considered the
fundamental question as to whether a patent may be granted in
Australia for a method of treatment of disease or sickness in human
beings.The court noted that there were arguments for and against
allowing the granting of a patent in such circumstances:
On both humanitarian and economic grounds the search for medical
advance is to be encouraged.The award of limited monopolies is a
standard way of helping to compensate for the expense of research.
Ultimately the resolution of this question is a balancing exercise.
There is on the one hand a need to encourage research in connection
with methods of medical treatment and on the other hand the need
not unduly to restrict the activities of those who engage in the
therapy of humans..... There is no statutory provision in Australia
prohibiting the grant of a patent for a process of medical
treatment of a human ailment or disease in a human being.It is
noteworthy that the Parliament had the opportunity to exclude
methods of treating the human body when it enacted the 1990 Act,
but the limit of the exclusion was s. 18(2), namely:'human beings,
and the biological processes for their generation, are not
patentable inventions' cf. s.4, Patents Act 1977 (UK).
The New Zealand Court of Appeal held in the Commissioner of
Patents v The Wellcome Foundation Limited (1983) 2
IPR 156(8) (Somers, McMullin and Cooke JJ) that patents could be
given for methods of treating patients.The case concerned a patent
for an invention which related to the use of a drug, previously
used for the treatment of malaria, for the purpose of treating
leukaemia. McMullin J as quoted by the High Court said:
that there was much to be said for developing the law to allow
the grant of patents for methods of treatment of human illness by
the putting of known compounds to new therapeutic uses. Human
suffering may thereby be alleviated to the greater good of
mankind.Research may be encouraged by the knowledge that what is
discovered or invented will be protected from competition and
assured of a reward.But, he said, there is another side to the
picture.The grant of a patent is the grant of a monopoly.In
recognition of this feature, the patents legislation aims to
balance the desirability of encouraging and protecting
technological advances against the restrictions, impediments and
even abuse which may result from monopolies.A shift in emphasis
which favours one interest will probably be achieved only at the
expense of the other.Whether and to what extent any significant
innovative movement is justifiable is not a matter for the
courts.His Honour said that patent law is a rather artificial,
highly complex and somewhat refined subject.It involves scientific
and commercial features outside every day experience and the
knowledge of the courts.Any major thrust should be left to
Parliament.
Intellectual Property Rights - Arguments For
Intellectual property rights are private rights and are designed
to encourage the invention or discovery of items that are useful or
desirable.There are economic arguments in favour of supporting
these private rights:
- 'Well-defined property rights foster productive behaviour such
as investment and innovation'.(9)
- Intellectual property rights also promote research, technology
and domestic industries by providing an economic incentive for
individuals to put their efforts into innovative
activities.(10)
- In the case of pharmaceuticals, many companies would not put in
the amount of money required to screen potential chemicals for
their possible uses, identify those that may have useful properties
and then clinically test them to satisfy health and safety
standards, if there was not the guarantee that at the end of a
'successful' process, they would make a profit.Such profit of
course would have to cover their costs in developing the
pharmaceutical product and attaining its registration as a
therapeutic good.For example, Mr Pat Clear, Chief Executive Officer
of the Australian Pharmaceutical Manufacturers Association said in
April 1997:
The extension to patent life guarantees greater return for
companies that have spent millions of dollars and years developing
new medicines, while allowing manufacturers of generic products to
'springboard'. [Springboard being a term for the generic copying of
drugs].(11)
Intellectual Property Rights - Arguments Against
While few people would argue against intellectual property
rights generally, there are a few categories of intellectual
property rights to which some sectors of the community have voiced
objections:
- One argument against conferring intellectual property rights
over medical research is that there are other incentives such as
awards, prizes and government funded R&D that can stimulate
innovative research and activities.(12)
- Some argue against affording such protection given by patents
to individuals or, more commonly, companies.For example, some
groups claim that their knowledge of indigenous species is being
exploited with large multinational companies being allowed to
expropriate the knowledge, patent the chemical extract or
derivative and then exploit this for their own profit, often at the
expense of the indigenous groups.Shiva and Holla-Bhar claim that
this has occurred with the Neem Tree, which has been used by Indian
residents for centuries as a panacea for a variety of medical
conditions.Whilst the Neem tree is not the subject of any patent
protection in India (that country having legislation which does not
permit the patenting of life forms), a number of extracts of Neem
have been patented in the USA by multinationals.(13)
- Whilst some are not opposed to intellectual property rights for
discoveries, inventions or other specified works, they nevertheless
argue that it is morally and religiously repugnant to patent 'life'
or portions of 'life forms' such as DNA and object to intellectual
property rights extending to these things.For example, in April
1997 it was reported that an American company, Biocyte, had been
granted a Europe-wide patent on blood from human umbilical
cords.That blood is used to treat people with diseased bone
marrow.Biocyte argued that they had spent more than $8 million on
developing the process of freezing the blood.However, opponents
from the medical profession claimed that it was immoral and
unethical to patent cord blood.(14)
- Intellectual property rights do not always recognise
'collective works' or collective ideas and therefore arguably do
not provide adequate recognition and protection of their cultural
products and expressions of indigenous people.(15)
- The community as a whole may have their access to better
medication limited by the monopolies created by patents.
- Current patent-holders, who arguably priced their
pharmaceutical products so as to recover their R & D costs and
make a profit over the 15 year patent, will get a windfall.
Other matters
The existing Commonwealth legislation prevents patent attorneys
and solicitors from being in a multi-disciplinary partnership.The
Bill will relax this rule.
The Bill will extend patent protection for pharmaceutical
products and will also establish a Professional Standards Board for
Patent and Trade Mark Attorneys.This Board will replace the Patent
Attorneys Professional Standards Board and will allow universities
to take over some of the education and examination functions
previously done by the Board.One intended outcome is to make it
cheaper and easier to protect new ideas and to lodge trade mark
applications.(16)
Design Law
The Australian Law Reform Commission circulated an issues paper
on Designs in 1993 and then reported on the state of Australian
Design Law in 1995.The report No. 74 Designs contained 188
recommendations.
Schedule 1 - Extension of pharmaceutical patents
Item 3 inserts a new Division into the
Patents Act 1990 which allows for the applications by
pharmaceutical patent owners for an extension of their patent.The
product must be listed on the Australian Register of Therapeutic
Goods and the date of the first regulatory approval must be at
least 5 years after the date of the patent.Thus only those products
which have had a lead-in time of at least 5 years can have their
patent extended.
The regulations will specify what form the application for
extension will take and what documents or information it must be
accompanied by.
Proposed section 75 allows the Minister or 'any
other person' to object to the granting of a patent extension but
only if the application is in the form specified by proposed
sections 70 and 71.
The term of the patent extension is to be equal to the lead in
time less five years (proposed section 77) and for
a maximum of five years.Currently the maximum term of patents is 15
years and this will increase to 20 years as a result of the
proposed changes.
Schedule 2 - Patent attorneys and trade marks attorneys
Item 1 amends the Copyright Act 1968
so as to include as a fair dealing with a literary, dramatic,
musical or artistic work, discussions with a duly registered trade
marks attorney for the purpose of getting their professional
advice.
Item 9 proposes to insert a new section in the
Designs Act 1906 which gives patent attorneys and trade
marks attorneys a right of lien over documents and property of
their clients.A right of lien is traditionally something held by a
solicitor or barrister.It arises when the solicitor or barrister
has done work for a client but has not been paid for that work.In
such cases the solicitor or barrister can retain the client's
documents and file until their account is paid.
Item 13 inserts proposed section
198 which will amend the Patents Act 1990 so as
to require the Register of Patent Attorneys, currently kept at the
Patent Office, to be kept by the Designated Manager (defined in
proposed section 200A as the person declared to be
a specified Senior Executive or someone in the position and
performing the duties of that Senior Executive, by the Secretary to
the Department).In addition, the requirements for being registered
as a patent attorney are being changed.There will no longer be a
requirement to be an Australian citizen (just a person who is
ordinarily resident in Australia) but there is a new requirement to
be of'good fame, integrity and character' and not to have been
convicted of a prescribed offence within the previous 5 years.
Item 16 inserts a definition of intellectual
property at the end of existing section 200 (which deals with the
privileges given to patent attorneys).The definition of
intellectual property differs from the definition in the
international agreements.
Item 20 amends subsection 201(7) so that
employees are not liable for offences against the Patents Act
1990 committed by their employers or by them in their capacity
as employees.Companies within a related company group are not taken
to have committed an offence just because one of their related
companies has.
Items 18 and 19 relax the requirement that all
partners in a partnership be qualified as patent attorneys if the
partnership does that type of work, however, proposed
section 202A makes it an offence to a non-registered
patent attorney partner to do the work of a patent attorney.The
penalty is 30 penalty units (under section 4AA(1) of the Crimes
Act 1914 one penalty unit is currently $110.00).
Item 26 establishes the Professional Standards
Board for Patent and Trade Marks Attorneys.This Board will oversee
the regulation of patent attorneys and trade mark attorneys with
respect to their qualifications, registration and professional
conduct.
Existing section 155 prevents unauthorised persons from working
on trade mark related matters.Similarly the current provisions of
the Trade Marks Act 1995 require a trade marks attorney to
have certain qualifications.Item 36 repeals
existing section 155 thereby removing restrictions on who can
practice.(17) Although proposed subsection 156(1)
will still make it an offence for an unregistered person to hold
themselves out as a trade marks attorney.
Proposed subsection 228A provides for the
Register of Trade Marks Attorneys to be kept by the Designated
Manager (see item 13 above).Persons applying to be registered as
trade mark attorneys must be registered provided that they meet the
criteria set out in proposed subsection 228A(4) which include that
the person has not been convicted of a prescribed offence within
the previous 5 years.Other qualifications may be prescribed by
regulations or examinations may be required by the Professional
Standards Board, although the Second Reading Speech anticipates
there being no technical qualification required:
Qualifications for registration as a trade marks attorney will
be less rigorous than those required for registration as a patent
attorney as there will be no requirement for a technical
qualification.(18)
Proposed section 229 gives registered trade
mark attorneys the same protections as a solicitor with respect to
communications with their clients.They are given the same right of
lien that a solicitor would have over the documents and property of
their clients as well.
Item 46 will extend the power of the
Governor-General to make regulations under the Trade Marks Act
1995. The regulations will be able to cover the making of
complaints and hearing of charges against registered trade mark
attorneys and associated matters.
- For a more comprehensive discussion about intellectual property
see Bailey, B New Ideas, Old Laws: Copyright, Patents Trade
Marks and Designs, and How To Avoid Plagiarism Parliamentary
Library Background Paper No. 12 1995/96.
- McKeough, Stewart, Intellectual Property in Australia
(2nd ed) 1997: 1.
- Golvan, C An Introduction to Intellectual Property Law
(1992): vii.
- Annual Report 1995-96, Department of Industry, Science &
Tourism: 110.
- Ibid: 113.
- McKeough, Stewart, Intellectual Property in Australia
(2nd ed) 1997: 9.
- Article 1(2) of TRIPS describes intellectual property as
encompassing all the rights described in sections 1 to 7 of Part II
of the Convention.
- Cited with approval in the Federal Court case of
Anaesthetic Supplies Pty Ltd v Rescare Ltd 122
ALR 141.
- Rapp, R & Rozek, R, Benefits and Costs of Intellectual
Property Protection in Developing Countries Oct 1990 Journal
of World Trade v24(5) 75-102 at 78.
- Ibid: 81.
- Reported in The Age (Melb) on 9 April 1997, story by
Paul Chamberlin.
- Ibid: 89.
- Shiva, V & Holla-Bhar, R Intellectual Piracy and the
Neem Tree, Ecologist v23(6) Nov/Dec 1993: 223-227 at 223.
- Reported in the Sydney Morning Herald, p 10, 15 April
1997, story by Andrew Gilligan.
- See Davis, M Indigenous Peoples and Intellectual Property
Rights Parliamentary Library Research Paper No. 20 of
1996/97.
- Reported in The Australian, p 23, 12 March 1997, story
by Madeleine Goorey.
- Second Reading Speech, The Hon Warren Truss MP, Minister for
Customs and Consumer Affairs.
- Ibid.
Susan Downing
4 December 1997
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ISSN 1328-8091
© Commonwealth of Australia 1997
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