Part F. Licensing and Commercial Arrangements

Part F examines issues surrounding the exploitation of patent rights, in particular the licensing of such rights by patent holders. This Part considers how the government and industry can take steps to improve commercialisation and access to licensed technology. The Part also examines the role of competition law in relation to the anti-competitive use of intellectual property rights and mechanisms for monitoring the prices of patented genetic technologies.

Chapter 22 describes the various types of patent licences and their usual terms. The size and character of the Australian biotechnology industry mean that patent licensing is particularly important to facilitate further research and to allow the development and commercialisation of products. The chapter notes that while available evidence does not suggest restrictive licensing practices are pervasive in the Australian biotechnology industry, participants in the sector may have experienced some difficulties negotiating patent licences. The ALRC considers that an effective way to address these matters is for government, working with industry, to enhance education programs about licensing inventions that involve genetic materials and technologies. The ALRC also recommends that the peak industry body, AusBiotech Ltd, develop model licence agreements and consider whether additional industry initiatives are needed to facilitate the licensing of gene patents.

Chapter 23 discusses another option to facilitate access to patented genetic inventions, namely the creation of a statutory licensing scheme under the Patents Act. In the light of recommendations made in the Report to facilitate access to patented genetic inventions, and due to the lack of a demonstrated need, the ALRC does not recommend a statutory licensing scheme. However, the chapter identifies the United Kingdom’s voluntary ‘licence of right’ for patented inventions, and the regime for licensing schemes within Part IV of the Copyright Act 1968 (Cth) as useful models, should the need for a statutory licensing scheme arise in the future.

Chapter 24 examines the extent to which Part IV of the Trade Practices Act 1974 (Cth) (TPA) can be used to address the anti-competitive exercise of intellectual property rights in genetic materials and technologies. The Inquiry did not hear evidence that the exploitation of intellectual property rights in such inventions has raised significant competition problems to date. Nevertheless, the ALRC notes both the potential for problems to arise and the concerns expressed in previous reviews about the lack of clarity in relation to intellectual property rights under the TPA. The ALRC recommends that the TPA be amended to clarify the relationship between Part IV of the Act and intellectual property rights. The Australian Competition and Consumer Commission (ACCC) has previously been requested to issue guidelines to clarify this relationship, and the ALRC recommends that this be done both generally and in relation to genetic materials and technologies, in particular. The ALRC also recommends that health departments and other stakeholders should make use of the existing complaint procedures under the TPAwhere evidence arises of anti-competitive conduct that may have an adverse impact on medical research or the cost-effective provision of healthcare.

Chapter 25 discusses the various forms of prices oversight that are available to the Australian Government and recommends that if evidence arises that the price of patented genetic inventions is having an adverse impact on access to healthcare services, the Government should use these mechanisms to investigate firm or industry pricing practices.