02.08.2010
26.43 DP 68 proposed that the Australian Health Ministers’ Advisory Council (AHMAC), and the Department of Health and Ageing (DHA) develop policies regarding the circumstances in which is it is appropriate for the Crown to exploit a patented invention under the Crown use or acquisition provisions for the purpose of promoting human health.[71] This proposal received considerable support in submissions.[72]
26.44 DHA agreed that AHMAC would be the most appropriate body to develop policies in relation to Crown use because the provision of health services is primarily a state and territory responsibility.[73] However, the Department of Human Services Victoria suggested that the proposed Human Genetics Commission of Australia[74] might be a more appropriate body to develop such policies.[75] GlaxoSmithKline questioned the need for national policies and submitted that specific cases where Crown use might be justified should be considered on their merits.[76]
26.45 DP 68 also proposed that the Patents Act be amended to clarify that ‘the services of the Commonwealth or of a State’ include the provision of healthcare services or products to members of the public.[77] Many submissions agreed that such an amendment is desirable to ensure that the Crown use provisions can be used, where necessary, to provide healthcare to the public.[78]
26.46 A number of submissions expressed concern that the reforms proposed by the ALRC could encourage the exercise of Crown use in inappropriate circumstances.[79] For example, the Western Australian Department of Industry and Resources stated that the Crown use provisions ‘should be reserved for extreme or emergency situations and should not be used as a standard method for utilising patented inventions in the health system’.[80]
26.47 Finally, DP 68 proposed that the Patents Act be amended to provide that the Crown must pay such remuneration or compensation as is agreed between the parties or ‘determined by a prescribed court to be just and reasonable having regard to the economic value of the patent’.[81] This formulation follows the language of the equivalent compulsory licensing provision and was seen as important in providing reassurance to affected patent holders that Crown use is not a means of obtaining free use of the invention.[82]
26.48 While this proposal was generally supported,[83] concerns were raised about the difficulties involved in assessing remuneration or compensation.[84] The DHA agreed with the proposal but expressed reservations about the implications of referring to the ‘economic value of the patent’.[85]
26.49 The ACIP Discussion Paper raised concerns about whether the remuneration provisions are fair and equitable for patent holders, especially individuals and small to medium-sized enterprises.[86] A patent holder and a Crown authority may have unequal bargaining power and, where they are unable to agree on remuneration, the only remedy for the patent holder may be to take the matter to court. Such proceedings may be costly and cause further delay in payment.
26.50 More generally, it has been suggested in submissions to the ACIP Discussion Paper that there should be an alternative mechanism for determining remuneration for Crown use of patents—perhaps similar to the Copyright Tribunal.[87] Submissions to ACIP also suggested that, whatever mechanism is used, further guidance is desirable on determining remuneration.
[71] Australian Law Reform Commission, Gene Patenting and Human Health, DP 68 (2004), Proposal 26–1.
[72] Caroline Chisholm Centre for Health Ethics Inc, Submission P69, 2 April 2004; Walter and Eliza Hall Institute of Medical Research, Submission P71, 13 April 2004; Commonwealth Department of Health and Ageing, Submission P79, 16 April 2004; Australian Centre for Intellectual Property in Agriculture, Submission P81, 16 April 2004; Royal College of Pathologists of Australasia, Submission P82, 16 April 2004; Department of Health Western Australia, Submission P89, 16 April 2004; Cancer Council Victoria, Submission P101, 20 April 2004; Centre for Law and Genetics, Submission P104, 22 April 2004; Department of Human Services Victoria, Submission P111, 30 April 2004; G Suthers, Submission P116, 4 May 2004; Genetic Support Council WA (Inc), Submission P119, 13 May 2004.
[73] Commonwealth Department of Health and Ageing, Submission P79, 16 April 2004.
[74] See Australian Law Reform Commission and Australian Health Ethics Committee, Essentially Yours: The Protection of Human Genetic Information in Australia, ALRC 96 (2003), rec 5–1.
[75] Department of Human Services Victoria, Submission P111, 30 April 2004.
[76] GlaxoSmithKline, Submission P85, 16 April 2004.
[77] Australian Law Reform Commission, Gene Patenting and Human Health, DP 68 (2004), Proposal 26–2.
[78] Caroline Chisholm Centre for Health Ethics Inc, Submission P69, 2 April 2004; Walter and Eliza Hall Institute of Medical Research, Submission P71, 13 April 2004; Commonwealth Department of Health and Ageing, Submission P79, 16 April 2004; Australian Centre for Intellectual Property in Agriculture, Submission P81, 16 April 2004; Royal College of Pathologists of Australasia, Submission P82, 16 April 2004; Department of Health Western Australia, Submission P89, 16 April 2004; Cancer Council Australia, Submission P96, 19 April 2004; Cancer Council Victoria, Submission P101, 20 April 2004; Centre for Law and Genetics, Submission P104, 22 April 2004; Genetic Support Council WA (Inc), Submission P119, 13 May 2004. However, F B Rice & Co suggested that the Crown use provisions are designed with the intention that the Crown receives the benefit of the service, or product directly (and not the public): F B Rice & Co, Submission P84, 16 April 2004.
[79] Department of Industry Tourism and Resources, Submission P97, 19 April 2004; Western Australian Department of Industry and Resources, Submission P90, 16 April 2004.
[80] Western Australian Department of Industry and Resources, Submission P90, 16 April 2004.
[81] Australian Law Reform Commission, Gene Patenting and Human Health, DP 68 (2004), Proposal 26–3.
[82] Commonwealth acquisition of a patent under s 171 of the Patents Act would, in any case, fall within the scope of s 51(xxxi) of the Australian Constitution, which requires that any acquisition of property—including intellectual property—by the Commonwealth must be on ‘just terms’.
[83] Walter and Eliza Hall Institute of Medical Research, Submission P71, 13 April 2004; Royal College of Pathologists of Australasia, Submission P82, 16 April 2004; Department of Health Western Australia, Submission P89, 16 April 2004; Department of Industry Tourism and Resources, Submission P97, 19 April 2004; Cancer Council Victoria, Submission P101, 20 April 2004; Queensland Government, Submission P103, 22 April 2004; Centre for Law and Genetics, Submission P104, 22 April 2004; Genetic Support Council WA (Inc), Submission P119, 13 May 2004.
[84] Walter and Eliza Hall Institute of Medical Research, Submission P71, 13 April 2004; Commonwealth Department of Health and Ageing, Submission P79, 16 April 2004.
[85] ‘If the economic value is defined as “what the market will bear”, then this will not necessarily yield a just and reasonable outcome in a monopoly situation’: Commonwealth Department of Health and Ageing, Submission P79, 16 April 2004.
[86] See Advisory Council on Intellectual Property, Review of Crown Use Provisions in Patents and Designs Legislation (2003), 9–10.
[87] The Copyright Tribunal determines remuneration when copyright material is used for the services of the Crown: see Copyright Act 1968 (Cth) ss 153E, 183B. The Copyright Tribunal may have regard to the ‘going or market rate for the use of material’ and place the parties in a notional bargaining situation, where they are ‘deemed to act reasonably and treated as willing but not anxious parties to the bargain which has been constructed’: see, eg Seven Dimensions Pty Ltd (Unreported, Australian Copyright Tribunal, 19 July 1996); J Lahore, Copyright and Designs: Looseleaf Service (1996), [30,110].