Crown use in research and healthcare

26.33 The Crown use provisions are of broad potential application to the conduct of research and the provision of healthcare. However, as discussed below, there are uncertainties about the application of the Crown use provisions in these areas. These relate to whether particular bodies are the Crown and whether exploitation is for the services of the Crown.

Application to research

26.34 The use of patented genetic materials or technologies in research by a Commonwealth or state organisation, such as the CSIRO or a state public teaching hospital, would clearly involve exploitation by the Commonwealth or a State for the services of the Commonwealth or a State.

26.35 As discussed in Chapter 11, most human health research in Australia is funded by government and occurs in research institutions and universities. However, these bodies may not constitute the Commonwealth or a State, or an authority of the Commonwealth or of a State, for the purposes of the Patents Act. For example, publicly funded research is often conducted by medical research institutes, such the Garvan Institute of Medical Research (Garvan Institute) and the Walter and Eliza Hall Institute of Medical Research (WEHI). Such institutes may be established by state legislation^[60] and may be affiliated with public sector universities or hospitals.^[61] Yet they are self-governing, set their own research priorities, and receive some funding from non-government sources, including private donations.

26.36 Following the approach taken by the Federal Court in Stack,^[62] such bodies might not constitute authorities of a State for the purposes of the Patents Act. They are not ‘impressed with the stamp of government’ because their functions are not governmental or delegated by the State. Further, while institutes such as the Garvan Institute may be established by state legislation, the state executive generally does not retain a prominent role or practical involvement in their governance or day-to-day operation.^[63]

26.37 Another issue that arises is whether research is for the services of the Commonwealth or of a State. Where research is conducted by an authority of the Commonwealth or of a State, such as the CSIRO or a public teaching hospital, it could be expected the research would be considered to be for the services of the Commonwealth or of a State. A government authority would be using the patented invention directly for government research purposes.

Application to healthcare

26.38 There are similar questions about the application of the Crown use provisions to the use of patented genetic materials and technologies in the provision of healthcare. In Australia, responsibility for the provision of healthcare is divided between Commonwealth, state and territory governments, and between the government and non-government sectors.^[64]

26.39 In most cases, it will be clear whether the use of patented genetic materials or technologies in healthcare involves exploitation by an authority of the Commonwealth or of a State—for example, where medical genetic testing of patients is carried out by a public sector laboratory attached to a state public hospital. It seems equally clear that the same testing carried out by a private sector laboratory or a private medical practitioner would not involve exploitation by an authority of the Commonwealth or a State.

26.40 A more problematic issue is whether the provision of healthcare to patients is for the services of the Commonwealth or of a State. Following the reasoning in Pfizer and Stack,^[65] it seems likely that the use of a patented genetic test by a public hospital would be held to be for the services of the State. The provision of healthcare by public hospitals to their patients is a function of the State and its health authorities. However, the position is not beyond doubt. For example, a firm of patent and trade mark attorneys, F B Rice & Co, submitted that the term ‘services of the Commonwealth or the State’ should not include those services which, like public health services, are funded by government but provided to members of the public.^[66]