Research and regulatory use exempt from patent infringement

The Intellectual Property Laws Amendment (Raising the Bar) Act 2012 was passed into law on 15 April 2012. The majority of provisions in the Act come into effect on 15 April 2013. However, the exemptions for research and regulatory use will apply immediately.

One of the schedules of the Bill was to provide freedom of access to patented inventions for the purposes of obtaining regulatory approval for non-pharmaceutical patents and conducting research. One of the aims of this schedule was to allow researchers to conduct genuine scientific inquiry without concerns regarding patent infringement. Under this new law, experimental activities conducted on or after 16 April 2012 are explicitly exempt from patent infringement.

To clarify, the exemption will apply where:

  • A researcher may be undertaking research on a purely non-commercial basis, or may be contracted and paid to undertake experiments
  • Research may be conducted with a view to “ultimately” commercialising the end-products of the experimentation or
  • Research may be undertaken with, and partially funded by, a commercial partner.

It is important to note that the exemption applies where the predominant purpose of the research is to gain new knowledge or test a principle about an invention. The exemption will not apply where the main purpose of the research is to commercialise a patented invention. The boundaries of “ultimately” commercialising a product and “predominant” purpose of research have yet to be defined.

An inclusive list of activities determined to be “experimental” has been included in section 119C of the Patents Act 1990 (Cth). The following activities have been legislated as exempt from patent infringement:

  • determining the properties of the invention
  • determining the scope of a patent claim relating to the invention
  • improving or modifying the invention
  • determining the validity of the patent or of a patent claim relating to the invention and
  • determining whether the patent for the invention would be, or has been, infringed by the doing of an act.

In the absence of any relevant case law, this list is not exhaustive and may be expanded upon by the courts at a later stage.

It is also important to note that the use of patented “research tools’ is NOT exempt from patent infringement. A research tool is used to “facilitate” an experiment but is not the subject of the experiment.

Further, the new law extends to non-pharmaceutical products the current exemption from patent infringement in relation to experimentation/trials necessary for gaining regulatory approval for pharmaceuticals. Thus, as of 16 April 2012, activities carried out solely for the purpose of obtaining regulatory approval for a product will not constitute an infringement of a patent covering the product, irrespective of the nature of the product. This provision is intended to remove the “de facto” extension of patent term afforded to patents covering, for example, medical devices and agricultural products for which regulatory approval is required. Competitors will now be able to seek regulatory approval during the term of a patent without fear of infringement proceedings irrespective of the type of product covered by the patent and hence will be able to enter the market place more quickly upon expiry of the patent.

It is important to note that stockpiling of the product during the term of the patent is still precluded for both pharmaceuticals and non-pharmaceuticals, as is manufacture of the product for export to another jurisdiction (even if this is done in the process of obtaining regulatory approval).

This new law has yet to be interpreted by the Australian courts and information provided herein is based on the currently understood intention of the amendments to the Act. If you require specific advice on your particular situation in light of this new law, please feel free to contact one of our attorneys who can further advise you.