Importance of patents for industry

18.6 Gene patents play an important part in enabling biotechnology companies to develop healthcare products, due to the high costs of research and commercialisation in this sector.[1] The ability to stop others exploiting a patent for a limited period gives biotechnology companies an opportunity to recoup the investment made in developing the patented invention, including potentially by creating a marketable healthcare product.

18.7 The importance of gene patents in the biotechnology industry is also recognised in the Australian Government’s National Biotechnology Strategy, which states that:

The development of capabilities for the effective management of Intellectual Property (IP) is an important element in securing the benefits of public and private sector research in biotechnology for the Australian community, industry and the environment.[2]

18.8 However, it is important to bear in mind that gene patents will have varying effects on companies depending on each company’s structure and commercial activities. Most biotechnology companies are both consumers and producers of technology. The biotechnology industry is characterised by companies using the inventions of others in their own research and as part of the products they market, such as tests or therapies. Gene patents may, therefore, be seen as having both positive and negative effects. The gene patents of others might block a company’s activity if access to the patented technology is necessary for its research or the creation of products it seeks to sell. However, the possibility of obtaining patent protection for its own products may stimulate innovation.

[1] Biotechnology Australia, IP Management, <> at 16 June 2004.

[2] Biotechnology Australia and Commonwealth Biotechnology Ministerial Council, Australian Biotechnology: A National Strategy (2000), 19.