Wednesday, 19 June 2013
Social Policy and Legal Affairs Committee; Report
On behalf of the Standing Committee on Social Policy and Legal Affairs, I present the committee's advisory report on the Intellectual Property Laws Amendment Bill 2013, together with the minutes of proceedings and evidence received by the committee.
In accordance with standing order 39(f) the report was made a Parliamentary Paper.
I ask leave of the House to make a short statement—a little bit shorter than the member for Scullin's very detailed and noteworthy report—in connection with this report.
This report follows on from the great work of the Productivity Commission and Intellectual Property Australia, IP Australia. It is a short report recommending that the legislation be passed. I do make particular reference to two of the witnesses that we heard from, Dr Luigi Palombi and Dr Matthew Rimmer. I particularly commend Dr Palombi's great work in gene patents, but I disagree with his recommendations in terms of this piece of legislation on this particular matter. Whilst I am on the record as supporting many of his endeavours in terms of gene patents, I think in this IP area we have a slight disagreement.
The Productivity Commission started this process. It has been a long, considered process. I commend the report to the House and hope for a contribution from my very capable deputy chair, who has assisted me throughout this 43rd Parliament, and I wish her well in her future endeavours.
by leave—I thank my colleague the member for Moreton for his kind words. It has been a great pleasure to work with him. I have spoken in this House and written to the Speaker previously about the incredibly short time frames in which committees are expected to scrutinise bills, particularly very complex bills. Unfortunately, the inquiry into this bill has been an exemplar of that problem.
The Intellectual Property Laws Amendment Bill seeks to make complex changes to patent laws which have existed before Federation and that operate through an intricate web of international agreements. The bill is 60 pages long and the explanatory memorandum is more than 100 pages. The bill has been prompted by a report from the Productivity Commission, released only in March of this year, and that report is itself more than 300 pages long. Yet the inquiry into this bill was originally scheduled for only one hour during the previous sitting fortnight and after committee members had only a few days in which to digest all that material.
Further, it is concerning that a number of stakeholders and industry professionals were not aware that both the hearing and bill were proceeding in such a tight time frame. However, some were able to present their views to the committee on short notice, and outlined a number of points that they believe require further investigation. One area includes proposed changes to the Crown use provisions. Whilst patents protect the intellectual property rights of an inventor, Crown use allows for inventions to be utilised by the government in the public interest, such as for defence purposes or in times of national emergency, such as medical crises. The provision has rarely been used in Australia with only two instances of challenged Crown use applications being bought in over 100 years. The power can currently be used by arms of the government such as the departments with relative ease for the services of the Commonwealth, and suitable remuneration must be paid to the patent holder.
But in submission to the committee, patent experts were concerned that the changes in the bill to require ministerial declaration would unduly complicate the current system, which they submitted had served Australia well. Further, they noted that it could invite legal challenges with a patent holder challenging the declaration of a minister possibly as a strategic move to elicit more remuneration.
Another area of concern brought to the committee's attention was the interplay with the World Trade Organization's trade-related aspects of intellectual property rights agreement—or TRIPS, as it is known. The TRIPS agreement itself only allows for a compulsory licence to be granted to use or produce patented medication for primarily domestic use when there is a health emergency. The Doha declaration on TRIPS extended that exception to allow for compulsory licences in countries that have a capability to produce and export medicines to send it to other countries suffering medical emergencies where they have insufficient or no manufacturing capabilities of their own. But those recipient countries must also be World Trade Organization members. That presents some challenges in some cases, but the intent is to ensure that affordable medication can be made available to underdeveloped countries when necessary but it also protects the patent holder so that they still have a commercial incentive to produce vital medication.
The purpose of limiting the exception to WTO member countries is to ensure that states which benefit comply with the strict rules and utilise the cost-price medication only to ameliorate the health concerns in their country, rather than onsell for profit. That is because WTO members can utilise the organisation's dispute resolution framework, including sanctions, if necessary.
But this sets up an ethical conflict. In Australia's region, East Timor, for instance, is not a WTO member and may require assistance from Australia as a pharmaceutical producer if a pandemic were to occur. Black letter compliance with TRIPS would prevent Australia from assisting, but the bill rightly expands the definition beyond that in TRIPS to allow Australia to respond and help less developed countries that are outside of the WTO and are in need. The bill's intent should be supported, but the ramifications of noncompliance with the strict provisions in TRIPS, if any, remain largely unexplored.
A number of drafting issues were also pointed out to the committee, such as the terminology 'to work the invention', which is inconsistent with existing provisions in the act that state 'exploit'. The difference could limit Crown use and compulsory licensing to only utilising an existing physical manifestation of the invention, rather than being able to utilise formulas or instructions to physically make the item in the first place.
In addition, a new test, the 'reasonable requirement test' is introduced. But the possible effects of this new test have largely been left unexamined as the committee has not had the time to further inquire.
As a result, the committee hopes that discussions on the bill in this parliament will distil greater clarity, but it is concerned that the bill is scheduled for debate in the next few sitting days, which will not allow for a more well-informed discussion or extra input from stakeholders.
The committee came to appreciate in its discussions a solid understanding of the many intricacies of patent law and intellectual property that is required to fully appreciate the impact of this bill. The rush to put it through the committee and into this parliament with less than desirable consultation has the potential to produce many unintended consequences in a system that has remained reliable for over 100 years.