On 24 August 2018, the creatively named Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2018 quietly received Royal Assent, with some parts of the new Act entering into force the following day.
As the name indicates, the primary focus of the new legislation is to implement the recommendations made by the Productivity Commission’s Inquiry Report on Intellectual Property Arrangements (PC Report), which we have discussed in previous articles here and here. Schedule 1 of the new Act contains these provisions, while Schedule 2 contains a number of additional minor amendments, generally intended to streamline the administration of Australia’s IP systems.
In this article, we canvas some of the key provisions of the new Act and how they will affect Australia’s existing IP regime.
Parallel importation of trade marked goods into Australia
The Act inserts a new section 122A into the Trade Marks Act 1995 (Cth) (TMA), which clarifies that the parallel importation of legitimately marked goods does not constitute trade mark infringement where these goods have first been brought to market by the registered owner of that mark or another person with a commercial relationship with the registered owner.
This concept, often referred to as ‘international exhaustion’ (as the registered owner’s rights are ‘exhausted’ following the initial application of the trade mark to, or in relation to, the goods), has been recognised by the Australian Courts in recent cases. However, the ambiguity in the drafting of the existing section 123 of the TMA allowed trade mark owners to use a loophole to subvert the TMA’s intention. The amendment seeks to align the TMA with the Court decisions and provide certainty for importers and trade mark owners.
The Explanatory Memorandum notes that the clarification of the Australian position on parallel importation is intended to strengthen competition, which will benefit both the market and consumers.
Grace periods for removal of registered trade marks for non-use
The Act also amends section 93 of the TMA, which governs the removal of registered trade marks on the basis of non-use. Previously, trade marks were only vulnerable to removal for non-use after five years from the date of filing (which is also the date of deemed registration). Following the amendment, registrations can be challenged for non-use from three years from the date the registered mark is entered onto the Register. This is not the date the application is filed, but the date when all issues have been resolved and all fees paid and the mark officially becomes registered. It is expected that by using the date for use calculations, some confusion will arise.
The amendment is intended to assist with decluttering of the Register and in most cases will reduce the effective period before a trade mark is vulnerable to removal, as most marks are registered within a year or less of application. In some instances, however, it could still be five years (or more) from the date of application before a mark is vulnerable to removal, if there are obstacles to registration that cause delay, such as an opposition to the registration.
Plant Breeder’s Rights (PBR) in essentially derived varieties (EDVs)
The Act inserts new provisions into the Plant Breeder’s Rights Act 1994 (Cth) to allow non-PBR-protected plant varieties to be declared EDVs. The intention behind EDVs is that, where a plant variety is predominantly derived from a PBR-protected variety and retains the same essential characteristics as the initial variety, without any important differentiating features, the PBR protection can be extended to this second variety. The practical outcome of this arrangement is that the breeders of the initial and second varieties typically come to a commercial arrangement such as a licence agreement, which protects the rights of original breeders while allowing scope for follow-on innovation.
However, as the Plant Breeder’s Rights Act 1994 (Cth) is currently drafted, breeders can avoid an EDV declaration if they do not file a PBR application for their second variety, due to a loophole in the drafting which means that EDVs can only be granted to PBR-protected varieties. The new provisions set out the new EDV process for non-PBR-protected varieties in an effort to close this loophole.
The PC Report suggests that the amendment will have the benefits of improving enforcement and compliance, which will in turn increase incentives to invest in innovation in this area.
Other amendments to Schedule 2 of the Act
The amendments contained in Schedule 2 of the Act do not constitute significant legal changes, however, they are intended to simplify and streamline Australia’s current IP rights protection processes to reduce complexity and delays. As noted in the Explanatory Memorandum, this is particularly important because of the large proportion of IP applicants in Australia who are self-filers and small and medium-sized enterprises.
Upcoming amendments to Australia’s patent system
Next up in changes to IP laws in Australia is the equally creatively named Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2018. Earlier this year, IP Australia released an exposure draft for public comment focusing on unintended consequences of the Bill or issues with the drafting (noting that the policies contained therein have already been agreed to by the Government). The Bill is expected to be introduced to Parliament in late 2018 or early 2019.
The Bill covers, among other things, amendments to the inventive step requirements for Australian patents, the introduction of an objects clause into the Patents Act, and the phasing out of the innovation patent system. As with the amendments discussed above, this upcoming round of amendments have come out of the PC Report recommendations and have already been accepted in principle by the Government. For our thoughts on the potentially unintended impacts of these changes, read our previous articles here and here.