Productivity Commission Introduces Anti-Intellectual Property Draft Report

In a lengthy report, the Australian Productivity Commission has recommended significant curtailment of the rights of Intellectual Property (IP) holders in Australia.


Australia is considered a net “importer” of IP in the sense that, for example, the majority of Australian patents are granted to foreign entities. Apparently utilising this as justification, the Commission seeks to undermine the rights of IP rights holders, and thereby provide the benefits of innovation “free of charge” to Australian society.   In so doing, they would, however, impact both Australian and foreign IP rights holders. The suggestion that the system should “enhance the wellbeing of Australians by providing protection to socially valuable innovations that would not have otherwise occurred’ is used (improperly in my view) as justification for the curtailment of the rights of effectively all those seeking to benefit from their own creativity and innovation.

The Commission’s rationale for scaling back the availability of IP protection ignores the fact that many innovations including, for example, new remedies for diseases and disorders, would not reach the market place without the incentives the IP system provides.  Once produced, many innovative products are easily copied.  Investors will back a business only when they believe that the innovative products produced by the company can be sold to the public protected from would-be copiers for a limited time by a monopoly.  The Commission’s reasoning also ignores the fact that it is entrepreneurs and investors, not the Government, that commercialise the innovations produced in our universities and institutes.  If investors are discouraged from investing in technology because the end product can be freely copied, we will see less, rather than more, new products and ideas being commercialised for the benefit of Australian society.

The Commission has suggested a number of anti-IP initiatives, including:

  • The nebulous “non-obvious” test (the test that an invention must meet in order to be patentable) will be set at a higher level of “inventiveness” than the highest benchmark the Commission could find in the European obviousness test.  The precision of the wording of the Commission’s text suggests to me that this may be an expression of the preferred position of the Australian Patent Office.
  • IP rights holders should be discouraged by introducing heavier renewal fees and claim fees for patents.
  • The innovation patent system should be abolished.
  • Extension of patent term rights for pharmaceuticals should be curtailed.
  • Patents for software and business methods should be abolished, with the Commission using justifications that have little to do with the need for these patents in the first place.
  • Copyright terms and geoblocking should be curtailed.
  • Mandatory disclaimers for trade mark holders should be introduced.
  • The full ambit of competition law should be applied to IP rights.
  • Australia’s entry into International Treaties in the IP space should be restricted.
  • Government and University Research should be accessible at no cost.

Whilst the 600 odd pages of the draft report provides justification for the appropriation of the IP holder’s rights, the core suggestion is that Australian society should not have to pay for this annexation.  The Productivity Commissions Report, authored by what some describe as economic rationalists, also pays little attention to the core premise of most IP rights i.e. that the patent or IP right is a “bargain” between the holder of the IP rights and the Government such that the innovation is revealed to the public in return for a time-limited monopoly (in which the innovator can recuperate costs and make a profit), on the basis that this will encourage the entry of inventive or creative solutions into the public domain.

Unfortunately, it is likely that the Productivity Commission has the ear of the Government.   As such, it would not be surprising if a number of these initiatives are introduced to the detriment of IP holders.

Submissions in response to the draft report close 2 June, 2016