International legal instruments

4.4 Australia is a party to a number of international legal instruments relating to intellectual property. The major international instruments that affect patent laws and practices in Australia are:

• Paris Convention for the Protection of Industrial Property 1883 (Paris Convention);^[3]

• Patent Cooperation Treaty 1970 (PCT);^[4]

• Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure 1977 (Budapest Treaty);^[5] and

• Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS Agreement).^[6]

4.5 Australian domestic law has given effect to significant provisions of each of these instruments. The instruments are outlined below, with a particular focus on the TRIPS Agreement.

Paris Convention

4.6 The Paris Convention is the principal international agreement in the field of ‘industrial property’, including patents, trademarks, utility models and industrial designs.^[7] In relation to patents, the Paris Convention requires a contracting State to provide the same rights to the nationals of other contracting States as are provided to its own nationals.^[8] It also establishes the right of priority, which provides that an applicant who files for intellectual property protection in one contracting State and then in a number of other States within a specified period of time (12 months in the case of patents) may have all applications treated as if they were filed on the date of the first application.^[9] It also provides that eligibility for patent protection is independently assessed by each contracting State.^[10]

Patent Cooperation Treaty

4.7 The PCT establishes administrative procedures to facilitate the simultaneous filing of patent applications on a single invention in multiple jurisdictions.^[11] Under the PCT, an inventor may seek patent protection in any number of PCT member countries by filing a single international application in one country—called the ‘Receiving Office’—and subsequently selecting the jurisdictions in which it may wish to obtain a patent.^[12] The grant or refusal of a patent based on a PCT application is, however, determined by each of the national or regional patent offices with which the PCT application is filed.^[13]

Budapest Treaty

4.8 The Budapest Treaty provides an international system for the deposit of micro-organisms as a means of satisfying the disclosure requirement for the grant of a patent by a national or regional patent office.^[14] The Budapest Treaty establishes that the deposit of a micro-organism^[15] with a designated ‘international depositary authority’ will satisfy the patent procedure requirements of national or regional patent offices that have recognised the effects of the Treaty.^[16]

TRIPS Agreement

4.9 The TRIPS Agreement establishes the minimum standard of patent (and other intellectual property) protection that each member of the World Trade Organization (WTO), including Australia, must provide under its national laws. More extensive patent protection may be provided under domestic law so long as it would not affect the operation of other provisions of the TRIPS Agreement. Significant provisions of the TRIPS Agreement relating to patents include:

• a requirement that member States make patent protection available for any inventions, whether products or processes, in all fields of technology;^[17]

• optional exclusions from patentability that may be adopted by member States;^[18]

• a right for member States to provide limited exceptions to patent rights (including public policy exceptions) so long as such exceptions do not unreasonably conflict with the normal exploitation of a patent, nor unreasonably prejudice a patent holder’s rights;^[19]

• limitations on compulsory licensing and government use of patents, including a requirement that adequate compensation be paid for such use;^[20] and

• a minimum patent term of 20 years.^[21]

4.10 Amendments to the Patents Act 1990 (Cth) (Patents Act)were necessary to bring Australian law into conformity with the TRIPS Agreement, and were enacted in the Patents (World Trade Organization Amendments) Act 1994 (Cth). The amendments included extension of the standard patent term from 16 years to 20 years, and changes to the compulsory licensing and Crown use provisions.

4.11 The implications of the TRIPS Agreement for patent reform are discussed below in general terms and are given further consideration in the context of specific reform options considered elsewhere in this Report.

4.12 Only one WTO case provides guidance on relevant provisions of the TRIPS Agreement.^[22] The WTO panel report in the Canada–Patent Protection case involved a complaint by the European Communities and their member States against Canada. It provides significant commentary on the application of TRIPS provisions relating to discrimination by field of technology and permissible exceptions to patent protection.^[23]

Discrimination as to field of technology

4.13 The TRIPS Agreement provides that patents shall be available for any inventions and that patent rights shall be enjoyable ‘without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced’.^[24] It has been suggested that the main aim of the non-discrimination clause was to ‘restrain the use of compulsory licences for lack of local exploitation’.^[25]

4.14 The Canada–Patent Protection case sets out some of the parameters for assessing prohibited discrimination by field of technology. The WTO panel drew a distinction between ‘differentiation’ and ‘discrimination’ and explained that the latter, but not the former, is prohibited by art 27(1). The panel stated that the ordinary meaning of the word ‘discriminate’:

certainly extends beyond the concept of differential treatment. It is a normative term, pejorative in connotation, referring to results of the unjustified imposition of differentially disadvantageous treatment.^[26]

4.15 The non-discrimination provision places constraints on the degree to which gene patents may be singled out for special treatment—for example, through new exclusions from patentability or defences to claims of infringement. However, the extent of these constraints is not clear.

Exclusions from patentability

4.16 The TRIPS Agreement provides that member States may exclude inventions from patentability if prevention of the commercial exploitation of an invention is necessary to protect ‘ordre public or morality,’ including ‘to protect human, animal or plant life or health or to avoid serious prejudice to the environment’.^[27]

4.17 The TRIPS Agreement also provides that member States may exclude from patentability ‘diagnostic, therapeutic and surgical methods for the treatment of humans or animals’ and ‘plants and animals other than micro-organisms, and essentially biological processes for the production of plants and animals’.^[28] These exclusions from patentability are discussed further in Chapter 7.

Exceptions to patent rights

4.18 The TRIPS Agreement provides that a patent shall confer on its owner exclusive rights to make, use, offer for sale, sell or import the patented product or process.^[29] However, the Agreement allows member States to provide limited exceptions to this level of patent protection. Article 30 states:

Members may provide limited exceptions to the exclusive rights conferred by a patent provided that such exceptions do not unreasonably conflict with the normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking into account the legitimate interests of third parties.

4.19 Article 30 establishes three conditions for a permissible exception. The exception must be ‘limited’, must not ‘unreasonably conflict with the normal exploitation of the patent’ and must not ‘unreasonably prejudice the legitimate interests of the patent owner, taking into account the legitimate interests of third parties’. These conditions are cumulative, so that failure to comply with any one of them may result in an exception being inconsistent with the TRIPS Agreement.^[30]

4.20 The relationship between art 30 and art 27(1), which prohibits discrimination as to field of technology, has been the subject of some debate.^[31] The Canada–Patent Protection case confirmed that art 27 does not ‘prohibit bona fide exceptions to deal with problems that may exist only in certain product areas’.^[32]

4.21 In the ALRC’s view, it may be possible to craft defences to claims of infringement of patent rights, or other exceptions to patent rights, that are specific to gene patents. Such a provision would differentiate between certain product areas but would not ‘discriminate’ by field of technology within the meaning of the TRIPS Agreement. Nevertheless, there would need to be strong arguments to justify differentiating gene patents, or a category of gene patents, from patents in other fields of technology.

4.22 The extent of permissible exceptions to patent protection under the TRIPS Agreement, including through new defences to claims of infringement, are discussed in Chapters 6, 13 and 21.

Compulsory licensing and Crown use

4.23 The TRIPS Agreement contains detailed provisions dealing with the use of patented inventions ‘without the authorization of the right holder, including use by the government or third parties authorized by the government’.^[33] In the context of Australian patent law and practice, these provisions apply to Crown use and compulsory licensing of patented inventions.

4.24 Under the TRIPS Agreement, the basic obligation of member States is to ensure that any use permitted without the authorisation of the patent holder is considered on its individual merits.^[34] Use may be permitted only if the proposed user has made unsuccessful efforts to obtain authorisation from the patent holder on reasonable commercial terms, except in cases of national emergency or other extreme urgency, or for public non-commercial use.^[35] There are detailed provisions in relation to the permissible duration and scope of authorised use, remuneration of the patent holder, and judicial or other independent review of Crown use or compulsory licensing decisions.^[36] The provisions of the TRIPS Agreement dealing with Crown use and compulsory licensing are discussed further in Chapters 26 and 27.

Patent term

4.25 The TRIPS Agreement provides that the term of protection shall not end before the expiration of a period of 20 years.^[37] Therefore, any system for standard patents that does not provide protection to the patent holder for 20 years would be inconsistent with the TRIPS Agreement.

4.26 In addition to the standard 20-year patent, Australian law also recognises a ‘second tier’ of protection called an ‘innovation patent’. These patents have a term of eight years, provide protection for inventions that represent a lesser level of inventiveness over the prior art, and are subject to less scrutiny by the Patent Office prior to grant.

Other international legal instruments

4.27 Activity in the international community to further the global harmonisation of patent laws may affect Australian patent laws and practices in the future. For example, the Patent Law Treaty 2000^[38]—which primarily addresses administrative issues relating to the patent system—was opened for signature on 1 June 2000 at a Diplomatic Conference of the World Intellectual Property Organization (WIPO).^[39] WIPO member States are currently drafting a Substantive Patent Law Treaty, which aims to achieve greater convergence among national patent laws in relation to the examination and grant of patents.^[40] In addition, other international legal instruments that are not primarily concerned with patent law or practice may nevertheless have an impact on Australian patent laws and practices, such as the Convention on Biological Diversity.^[41]