Compulsory licensing of patents

10 August 2012 | The Commission has been asked to report on the compulsory licensing provisions of the Patents Act 1990 (Commonwealth Patents Act). Compulsory licensing is a safeguard that may be invoked when the exclusive rights conferred by a patent are not meeting the reasonable requirements of the public or constitute anti-competitive conduct.

This inquiry was preceded by several reviews of Australia’s patents system, including those that focused on the patenting of genes. In November 2011, the Australian Government (2011) foreshadowed an inquiry on compulsory licensing in response to reports from the Australian Law Reform Commission (ALRC 2004) and Senate Community Affairs References Committee (SCARC 2010).

These bodies called for legislative changes to clarify the conditions under which a compulsory licence would be granted, noting that the provisions had rarely been used.

The full terms of reference for the inquiry are provided in Attachment A. In summary, the Commission has been asked to:

• assess whether the current compulsory licensing provisions can be invoked efficiently and effectively 
• advise on the frequency, and impact, of compulsory licences in comparable markets and the common features of such licences 
• recommend any measures that may be required to efficiently and effectively exercise Australia’s compulsory licensing provisions 
• recommend any alternative mechanisms deemed necessary to ensure that the balance between incentives to innovate and to access technology best reflects the objectives of reasonable access to health care, maximising economic growth and growing the Australian manufacturing industry 
• recommend measures to raise awareness of the compulsory licensing provisions.