15 May, 2018
The Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2018 (Bill) was introduced into the House of Representatives on 28 March 2018 with some notable changes since we reported in November 2017 on IP Australia's draft legislation proposing significant reforms to the Australian IP regime.
The Bill differs from the draft legislation in the following ways:
1 – Innovation patents are not being abolished: The Bill does not contain the controversial amendments to abolish the innovation patent system that had been included in the draft legislation. During the consultation period, a number of submissions highlighted concern over the proposal to abolish the regime and its likely financial impact on small and medium sized enterprises (SMEs). IP Australia has announced that the Government will undertake "further industry consultation" to better understand the needs of innovative SMEs before the phase-out occurs. It may be that, in keeping with the Government's National Innovation and Science Agenda, any change will come in the form of targeted and specific reform to support SMEs to engage in innovation and research and development.
2 – Significant revisions have been made to the new parallel import defence: The draft legislation introduced a new provision, section 122A, which provided a broad defence to infringement for parallel importation of trade marked goods or services. During the consultation period, IP Australia received a number of submissions expressing concerns over the wording of section 122A, particularly the requirement that "at the time of use, it was reasonable for the parallel importer to assume" that the mark had been applied or used with consent of the relevant party.
The Bill contains a modified version of section 122A which seeks to address these concerns. It provides that parallel importation of trade marked goods will not amount to infringement if:
- the goods are similar to the registered goods; and
- before the time of use, the parallel importer had made reasonable inquiries in relation to the trade mark; and
- at the time of use, a reasonable person, after making those inquiries, would have concluded that the trade mark had been applied by, or with the consent of, the registered owner of the trade mark or other persons authorised or permitted to use the trade mark by the registered owner.
The Explanatory Memorandum to the Bill also clarifies that the "reasonable to assume" limb of the test is to be assessed objectively. The extent of inquiries a parallel importer will be required to make will depend on the scenario. For example, where the goods are being offered at suspiciously low prices or through dubious trade channels, more searching inquiries may need to be made, such as contacting the trade mark owner to confirm consent.
The Bill retains most of the other significant changes proposed in the draft legislation. These are discussed in detail here and are summarised below:
Trade marks
As proposed in the draft legislation, the Bill reduces the period for filing a non-use removal application from five years from the filing date of the registration to three years from the date the trade mark is entered on the Register. The Bill also extends the ability to defer the acceptance deadline of an application so that it will be available during any extension of the acceptance period. The above amendments will only affect marks filed after the Bill comes into effect.
Plant breeder's rights
The Bill extends a plant breeder's right over an initial variety to another variety (the second variety) if the second variety is deemed to be "essentially derived" from the initial variety. It also inserts a new right for an exclusive licensee to bring an infringement action in Australia.
Unjustified threats of infringement
The Bill enacts all the amendments proposed in the draft legislation regarding unjustified threats of infringement, namely it:
- introduces unjustified threats provisions in the Plant Breeder's Rights Act 1994 (Cth);
- provides for additional damages to be claimed in relation to unjustified threats with respect to designs, patents, trade marks and plant breeder's rights;
- removes the ability of a party to avoid an unjustified threats action by commencing infringement proceedings; and
- introduces a new provision in the Trade Marks Act 1995 (Cth) which clarifies that mere notification of the existence of a registered trade mark is not a threat.
The position in relation to copyright and circuit layouts remains unchanged in that additional damages cannot be sought with respect to unjustified threats.
Administrative changes
The Bill retains the non-controversial administrative changes proposed in the draft legislation.
These include:
- providing IP Australia with the flexibility to take actions or give information through electronic means by the removal of requirements to do such things in writing;
- making requirements for the filing of documents consistent across all IP rights and the flexibility to allow IP Australia to determine how documents may be filed and fees may be paid.
- introducing computerised decision making, which is intended to be used for certain simple, non-discretionary decisions.
Next steps
No amendments to the Bill have been proposed in the House of Representatives. It is anticipated that the Bill will pass into law relatively soon.
Once the Bill passes, most of the proposed amendments, including the new parallel importation provision, will commence the day after the Bill receives Royal Assent. The changes in relation to plant breeders' rights will come into effect on a day to be fixed by a Proclamation.
For further information, please contact:
Jonathan L. Flintoft, Partner, Baker McKenzie
jonathan.flintoft@bakermckenzie.com
