Crown use of patents set for a shake-up

Last week, we blogged about the recommendations made by the Productivity Commission in its Report into the operation of the compulsory licensing provisions of the Patents Act.  In addition to making various recommendations on how the compulsory licensing provisions should be amended to improve their operation, and in the light of its mandate to “recommend any alternative mechanisms” to compulsory licensing, the Commission also proposed a range of recommendations in relation to the Crown use of patents.

These “Crown use recommendations” have found their way into the Intellectual Property Laws Amendment Bill 2013, which was introduced into the House of Representatives on 30 May 2013.  Among other proposed reforms, this Bill will:

  1. Clarify the scope of “Crown use”: the provisions currently apply where an invention is exploited “for the services of the Commonwealth or a State“, however the proposed amendments will clarify that those services will include services that an Australian, State and/or Territory Government has primary responsibility for providing or funding.
  2. Improve transparency and accountability in the Crown use process (exscept in emergency situations), by requiring:
    • Governments to first attempt to negotiate with the patent owner prior to invoking the Crown use provisions;
    • Ministerial authorisation for invoking the Crown use provisions; and
    • notification and the provision of a statement of reasons to the patent owner no less than 14 days prior to exploitation occurring.
  3. Provide that, in determining the amount of remuneration a patent owner is entitled to, this amount must be an amount that is just and reasonable and must take into account the economic value of the exploitation of the invention.

We will keep you updated on the progress of the Bill.

About the Author

James Ellsmore
James is a senior associate with King & Wood Mallesons' Intellectual Property team in Sydney. James assists clients to resolve intellectual property disputes, with a particular focus on patents, pharmaceuticals and the life sciences. He has acted for a variety of clients in matters concerning patent infringement and revocation proceedings in the Federal Court of Australia, patent opposition proceedings before the Commissioner of Patents, and matters arising from patent licence and technology agreements. James also has experience in the preparation of commercial, R&D and IP agreements for leading universities, research organisations and pharmaceutical companies. He also advises clients on regulatory issues affecting clients in the industrials, consumer and health sectors.
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