Spruson&Ferguson Australian Biotech Enews

In a previous newsletter we commented on whether Australian patent law allowed for a “research exemption” to patent infringement. In the light of the recent announcement of amendments to be made to the Patents Act (1990) to introduce an explicit exception to infringement, it is timely to re-visit that commentary.

Given that a significant proportion of Australia's biotechnology research output flows from public institutions such as universities, research institutes and hospitals, the question of “do we infringe by experimenting on or with this patented technology” is particularly pertinent. The traditional view, arising from nineteenth century UK case law, is that 'basic' or 'pure' research in such institutions using patented inventions was exempt from patent infringement, provided there was no “intention of selling”. However, the issue has never been decided by the Australian courts. Coupled with the fact that there is currently no explicit exemption to infringement for such uses in the Patents Act, and the diminishing of any distinction between 'basic' research and commercial research, this left an unacceptable degree of uncertainty for all concerned.

This uncertainty led to the Advisory Council on Intellectual Property (ACIP) being asked, in 2003, to “examine whether some types of patents are inhibiting research and development in Australia and determine whether both Australian researchers and business would benefit from introducing an experimental use exemption provision (or some other provision) into Australian patent legislation”. The results of the ACIP inquiry were released in October 2005 in a report entitled “Patents and Experimental Use”. In short, Report confirmed that there was a general belief that an exemption for experimental acts was part of the patent system but there was nevertheless a need for greater certainty.

Accordingly, the Report recommended amendments to the Patents Act to include an explicit experimental use exemption. In a recent media release, the government has indicated acceptance of those recommendations and foreshadowed that amendments will be made. Assuming the amendments are consistent with the wording and intent of the recommendations, the Patents Act will be amended to insert a provision which is in essence as follows:

The rights of a patentee are not infringed by acts done for experimental purposes relating to the subject matter of the invention that do not unreasonably conflict with the normal exploitation of a patent. Acts done for experimental purposes relating to the subject matter of the invention include:

determining how the invention works;
determining the scope of the invention;
determining the validity of the claims;
seeking an improvement to the invention.

The government's response also indicated that the legislative documentation associated with the amendment will clarify that acts done for experimental purposes relating to the subject matter of the invention may also include “seeking new uses for, or determining new properties of, the invention”.

Whilst these developments are to be welcomed the impending Federal election will likely delay the introduction of the legislation until 2008. We will keep you informed of progress of the amendments and their implications when finally introduced.

For more information please contact Dr Martin O'Brien at martin.obrien@sprusons.com.au