Rights of a patent holder

5.38 The Patents Act provides that the grant of a patent confers upon a patent holder the exclusive right to exploit, or to authorise another person to exploit, an invention during the patent term.^[61] ‘Exploit’ is defined in the Act to include:

(a) where the invention is a product—make, hire, sell or otherwise dispose of the product, offer to make, sell, hire, or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or

(b) where the invention is a method or process—use the method or process or do any act mentioned in (a) in respect of a product resulting from such use.^[62]

5.39 A patent does not, however, grant an absolute right to exploit an invention. A patent holder may have to satisfy other legal requirements in order to exploit the patented product or process. For example, a patented pharmaceutical compound may need to be approved under the Therapeutic Goods Act 1989 (Cth) before it can lawfully be marketed and sold as a treatment for a particular condition. In addition, a patent holder’s ability to exploit the invention may be subject to earlier patents not owned by the patent holder.

5.40 A patent holder may assign or license its patent rights to a third party. An assignment of a patent results in the transfer of all of the rights owned by the patent holder to a third party (the assignee).^[63] A licence of a patent does not transfer ownership of any patent rights; rather, it establishes terms upon which a third party (the licensee) may exercise certain patent rights without such use constituting infringement.^[64] Licensing practices with respect to patented genetic and biotechnological inventions are discussed in Chapter 22.

5.41 A patent holder is not obliged to exploit an invention claimed in a patent at any time during the patent term, nor to license or assign its patent rights. However, the failure to exploit the invention may encourage others to invoke the Crown use or compulsory licensing provisions in the Patents Act.^[65]

5.42 Patent rights remain subject to challenge even after the Commissioner of Patents accepts a patent application and after the patent is sealed. Section 20 of the Patents Act expressly states that nothing in the Act or in the PCT^[66] guarantees that a patent is valid. Challenges to patent rights are discussed in Chapter 9.