Bilateral free trade agreements

4.28 The TRIPS Agreement is the most comprehensive multilateral agreement on intellectual property. In addition, Australia may enter into international obligations with respect to intellectual property as part of bilateral free trade agreements with other countries. Such obligations may also place constraints on reform of Australian patent law and practice.

4.29 Most importantly, given the dominant position of the United States in the field of biotechnology, on 18 May 2004, the Australian Trade Minister (the Hon Mark Vaile), and the United States Trade Representative (Robert Zoellick) signed the Australia–United States Free Trade Agreement (AUSFTA). Before the AUSFTA can enter into force and become binding under international law, Australia and the United States must complete their ‘necessary internal requirements’ and exchange written notification that this has been done.[42] In the case of Australia, the internal requirements include passage of any legislation necessary to give effect to the agreement; in the case of the United States, they include ratification of the agreement by two-thirds of the Senate.[43] The target date for the agreement to enter into force is 1 January 2005.[44]

4.30 The AUSFTA contains a number of provisions relevant to patent law and practice. These include provisions with respect to: exclusions from patentability; revocation of patents; Crown use and compulsory licensing of patents; non-prejudicial disclosures; and the ‘usefulness’ requirement for patentability.[45] More generally, Australia and the United States agree to endeavour to reduce differences in law and practice between their respective patent systems and to participate in international patent harmonisation efforts.[46]

4.31 The provisions of the AUSFTA have implications for reform of Australian patent law. Amendments to the Patents Act are necessary to give effect to some provisions of the AUSFTA, for example, to preserve the criterion of a ‘patentable invention’ as a ground for revocation of a patent.[47] In other cases, where the AUSFTA reflects existing Australian law or practice, the agreement may act as a constraint on future change.[48] The implications of the AUSFTA for patent law reform are given further consideration in the context of specific reform options discussed elsewhere in this Report.

[42]Australia and United States, Australia–United States Free Trade Agreement, 18 May 2004, art 23.4.1.

[43] United States Constitution, art II, sec 2; L Henkin, Foreign Affairs and the US Constitution (2nd ed, 1996), Ch 7.

[44]Department of Foreign Affairs and Trade, Submission P93, 16 April 2004. See also Department of Foreign Affairs and Trade, Australia–United States Free Trade Agreement: Frequently Asked Questions, <> at 16 June 2004.

[45] See Australia and United States, Australia–United States Free Trade Agreement, 18 May 2004, art 17.9.

[46]Ibid, art 17.9.14.

[47]Ibid, art 17.9.5. See Ch 9. The US Free Trade Agreement Implementation Bill 2004 (Cth) was introduced into the House of Representatives on 23 June 2004.

[48] Examples include the transfer of ‘know-how’ in association with Crown use of a patent (see art 17.9.7(b)(iii) and Ch 26); and the grace period for public disclosures of information relating to an invention (see art 17.9.9 and Ch 14).