Intellectual property arrangements

Productivity Commission inquiry report no.78
20 December 2016

Australia’s intellectual property (IP) arrangements fall short in many ways and improvement is needed across the spectrum of IP rights.

IP arrangements need to ensure that creators and inventors are rewarded for their efforts, but in doing so they must: − foster creative endeavour and investment in IP that would not otherwise occur

− only provide the incentive needed to induce that additional investment or endeavour

− resist impeding follow-on innovation, competition and access to goods and services.

Australia’s patent system grants exclusivity too readily, allowing a proliferation of low-quality patents, frustrating follow–on innovators and stymieing competition.

− To raise patent quality, the Australian Government should increase the degree of invention required to receive a patent, abolish the failed innovation patent, reconfigure costly extensions of term for pharmaceutical patents, and better structure patent fees.

Copyright is broader in scope and longer in duration than needed — innovative firms, universities and schools, and consumers bear the cost.

− Introducing a system of user rights, including the (well-established) principles – based fair use exception, would go some way to redress this imbalance.

Timely and cost effective access to copyright content is the best way to reduce infringement. The Australian Government should make it easier for users to access legitimate content by:

− clarifying the law on geo-blocking

− repealing parallel import restrictions on books. New analysis reveals that Australian readers still pay more than those in the UK for a significant share of books. 

Commercial transactions involving IP rights should be subject to competition law. The current exemption under the Competition and Consumer Act is based on outdated views and should be repealed.

While Australia’s enforcement system works relatively well, reform is needed to improve access, especially for small and medium–sized enterprises.

− Introducing (and resourcing) a specialist IP list within the Federal Circuit Court (akin to the UK model) would provide a timely and low cost option for resolving IP disputes.

The absence of an overarching objective, policy framework and reform champion has contributed to Australia losing its way on IP policy.

− Better governance arrangements are needed for a more coherent and balanced approach to IP policy development and implementation.

International commitments substantially constrain Australia’s IP policy flexibility.

− The Australian Government should focus its international IP engagement on reducing transaction costs for parties using IP rights in multiple jurisdictions and encouraging more balanced policy arrangements for patents and copyright.

− An overdue review of TRIPS by the WTO would be a helpful first step.

Reform efforts have more often than not succumbed to misinformation and scare campaigns. Steely resolve will be needed to pursue better balanced IP arrangements

In formulating intellectual property policy, the Australian Government should be informed by a robust evidence base and be guided by the principles of:

• effectiveness, which balances providing protection to encourage additional innovation (which would not have otherwise occurred) and allowing ideas to be disseminated widely

• efficiency, which balances returns to innovators and to the wider community

• adaptability, which balances providing policy certainty and having a system that is agile in response to change

• accountability, which balances the cost of collecting and analysing policy – relevant information against the benefits of having transparent and evidence – based policy that considers community wellbeing.

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Suggested Citation

Productivity Commission , 2016, Intellectual property arrangements, Productivity Commission, viewed 25 April 2017, <http://apo.org.au/node/72016>.

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