Research defence in practice

13.37 Academic researchers often assume that their use of patented inventions is immune from claims of patent infringement.[60] Research conducted by Dr Dianne Nicol and Jane Nielsen confirms that many Australian researchers and research institutions harbour erroneous assumptions about the existence or scope of an existing experimental or research use defence. They note that some respondents to their 2003 survey of research institutions ‘put forward the argument that all research as such is exempt, whether it is conducted in research institutions or private sector’.[61] Other respondents commented on the difficulties of determining whether an exemption from patent infringement applies and confirmed that enforcement by patent holders is rare.[62]

13.38 Based on the survey results, Nicol and Nielsen looked at the scope of what they term the ‘practice-based research exemption’; that is, where the line is drawn between basic research, which is assumed to be exempt, and commercial research, about which there is no such assumption.[63] The scope of the practice-based research exemption is dependent on the enforcement practices of patent holders. A number of company respondents said that they would not ‘seek licences from participants in the research institution sector because this was not a wise decision from a business perspective’.[64] However, they stated that patents would be enforced once research became commercial.

13.39 It appears that patent holders’ decisions about whether or not to require licence fees from research organisations are often pragmatic and commercial, rather than legal in nature. Patent holders may choose not to seek licence fees in respect of some gene patents because research may add value to the invention. The use of patented inventions in research without a licence may be encouraged by the small size of the Australian market, which makes enforcement less worthwhile for patent holders.[65] Enforcement of patent rights may prejudice the ongoing sale of equipment or consumables to major clients.[66] Research organisations may make decisions about seeking licences based on similar risk or financial assessments.

13.40 Submissions to the ALRC confirmed that Australian researchers frequently rely on the existence of an experimental or research use ‘exemption’,[67] although the extent to which this is based on legal understandings or on expectations about the enforcement practices of patent holders is not entirely clear.[68] Reference was made to ‘a long standing scientific convention that non-commercial research is exempt from patent enforcement’.[69]

13.41 Further, researchers may simply be unaware of patents. Bio21 Australia Ltd (Bio21) stated that, while there was no evidence of research being impeded by the absence of an experimental use defence, ‘this is most likely due to researchers being unaware if they infringe patent rights’—a situation that may change with heightened awareness of the issue.[70] Similarly, the Cancer Council New South Wales referred to a lack of understanding among researchers about patent law and practice and stated that ‘it has not really occurred to many researchers that their work could be subject to a gene patent’.[71]

[60] See, eg, C Dennis, ‘Geneticists Question Fees for Use of Patented “Junk” DNA’ (2003) 423 Nature 105.

[61] See D Nicol and J Nielsen, Patents and Medical Biotechnology: An Empirical Analysis of Issues Facing the Australian Industry (2003) Centre for Law and Genetics Occasional Paper No 6, 218. The research institutions surveyed included universities, government institutions, publicly funded independent research institutions and private research institutions.

[62] Ibid, 219–220.

[63] Ibid, 218.

[64] Ibid, 219. Company respondents referred to the benefits to be derived from encouraging research in areas in which they have an interest; the adverse consequences of enforcing patent rights for a company’s reputation in the academic community; and problems in recovering damages from public sector researchers: D Nicol and J Nielsen, Patents and Medical Biotechnology: An Empirical Analysis of Issues Facing the Australian Industry (2003) Centre for Law and Genetics Occasional Paper No 6, 220.

[65] BresaGen Limited, Consultation, Adelaide, 15 September 2003.

[66] Australian Genome Research Facility, Consultation, Melbourne, 4 September 2003.

[67] Royal College of Pathologists of Australasia, Submission P26, 1 October 2003; Davies Collison Cave, Submission P48, 24 October 2003; Queensland Government, Submission P57, 5 January 2004; National Health and Medical Research Council, Submission P52, 31 October 2003; A McBratney and others, Submission P47, 22 October 2003.

[68] For example, the Queensland Government stated: ‘Universities are often able to obtain free licences or “peppercorn” licence fees for research purposes, by adopting the research use defence’: Queensland Government, Submission P57, 5 January 2004.

[69] Royal College of Pathologists of Australasia, Submission P26, 1 October 2003.

[70] Bio21 Australia Ltd, Submission P80, 16 April 2004.

[71] Cancer Council New South Wales, Submission P99, 20 April 2004.