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A statutory EUE exists in Australia (analogous to the US Hatch Waxman Act). Under current law, a patentee may obtain an extension of patent term as compensation for time lost in obtaining regulatory approval in Australia for a pharmaceutical substance covered by the patent. In return, from the date on which the extension is granted, third parties, e.g. generic manufacturers, can take steps to obtain regulatory approval including any form of experimentation, without fear of infringing the patent.
However, there is no statutory EUE for what is commonly called “university-type” research - although some believe that a general EUE is imported into Australian common law through the UK case Frearson1 in which it was held that absent “the intention of selling and making use” of the patented invention, experimentation is not an infringement of the patent. Notwithstanding the current ambiguity, Australian research institutions have habitually assumed immunity from infringement provided their research resulted in no immediately recognisable commercial gain.
The ACIP report recommended to the Australian Government that the Patents Act be amended to establish that “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” (emphasis added). 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 validity of the claim;
· seeking an improvement to the invention.
The authors of the report were particularly keen to point out, however, that users of the patent system should not consider the exemplified acts to be permitted acts as they will still be subject to the test of whether they “unreasonably conflict with the normal exploitation of the patent”. It is noteworthy that the language is derived from Article 30 of the World Trade Organisation Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and was included to ensure that the exemption is TRIPS compliant.
The ACIP concedes that uncertainty as to the boundaries of the exemption may arise - clearly that uncertainty would require clarification by the courts.
The ACIP report also mentions the possibility of reviewing the impact on the Australian industry of the absence of an exemption from infringement for activities relating to obtaining regulatory approval undertaken prior to the end of the initial patent term. This would extend the present EUE provisions to patents on which no extension of term had been approved.
Prior to the issue of the ACIP Report, the Australian Law Reform Commission (ALRC) conducted an inquiry into gene patenting in human health in which the issue of experimental use was raised. In its 2004 report, the ALRC recommended to the Australian Government that the Patents Act 1990 be amended to establish an exemption from patent infringement for acts done to study or experiment on the subject matter of a patented invention; for example, to investigate its properties and improve upon it. It recommended that the amendment should make clear that:
a) the exemption is available only if study or experimentation is the sole or dominant purpose of the act;
b) the existence of a commercial purpose or an objective does not preclude the application of the exemption; and
c) the exemption does not derogate from any study or experimentation that may otherwise be permitted under the Patents Act.
The Government’s response to both the ACIP and ALRC reports is eagerly awaited – although it remains to be seen whether implementation of the recommendations would, in practice, have any significant effect given that already “non-commercial experimentation” appears to be practiced in Australia without infringement suit.
1 Frearson v Lowe (1878) 9 ChD 48
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