The Australian Productivity Commission releases final report on intellectual property arrangements

The Australian Productivity Commission recently released its final report on their inquiry into Australian intellectual property (IP) arrangements.

The Commission’s inquiry adopted a holistic approach considering all of Australia’s IP rights, with the specific intention of identifying ways the IP system could be improved. The final report was publicly released on 20 December 2016 and includes a number of recommendations for consideration by the Australian Government.


In the September 2016 edition of Inspire, we outlined the terms of reference under which the Productivity Commission conducted their review1, in addition to the key recommendations that appeared in the Commission’s draft report2. Following its release, the draft report was subject to considerable public scrutiny and the Commission received 620 public submissions in response. Additionally, the Commission held various informal consultations and discussions with both private and government groups after issue of the draft report. Pleasingly, it would appear that the Commission did take notice of the response submissions, particularly those relating to the area of patentable subject matter.

Readers may recall that the draft report included a recommendation to specifically exclude business methods and computer software as patentable subject matter in Australia. Fortunately, in the final  report, the Commission wisely recommended a ‘wait and see’ approach, suggesting that ‘future grants of software patents should be monitored by IP Australia, with the data collected used to assess whether further software patent reform is needed.’3 The Commission also noted recent Australian court decisions which ‘have made clear that business methods, whether implemented in software or not, are not patentable subject matter.’4

Key recommendations


  • Amend ss 7(2) and 7(3) of the Patents Act 1990 (Cth) (Patents Act), such that an invention is taken to involve an inventive step if, having regard to the prior art base, it is not obvious to a person skilled in the relevant art.
  • Abolish the innovation patent system.
  • Incorporate an objects clause into the Patents Act.
  • Reform extensions of patent term for pharmaceuticals, such that they are only available for patents covering an active pharmaceutical ingredient, and are calculated based on the time taken by the Therapeutic Goods Administration for regulatory approval over and above 255 working days.
  • Require applicants to identify the technical features of the invention in the claims.
  • Increase renewal fees.
  • Reduce the threshold for excess claim fees.

Trade marks and geographical indications

  • Reduce the grace period for non-use challenges from five to three years.
  • Remove the presumption of registrability in assessing whether a mark is misleading or confusing at application.
  • Ensure that parallel imports of marked goods do not infringe an Australian registration when the goods have been brought to market elsewhere by the owner or licensee.
  • Require trade mark applicants to state whether they are using the mark or ‘intending to use’ the mark at application, registration and renewal.
  • Seek confirmation from owners that register with an ‘intent to use’ that their mark is in use following the non-use grace period.

Plant breeder’s rights

  • Amend the Plant Breeder’s Rights Act 1994 (Cth) to enable essentially derived variety declarations to be made in respect of any variety.

Copyright use and licensing

  • Make unenforceable any part of an agreement restricting or preventing a use of copyright material that is permitted by a copyright exception.
  • Permit consumers to circumvent technological protection measures for legitimate uses of copyright material.
  • Amend the Copyright Act 1968 (Cth) to clarify that it is not an infringement for consumers to circumvent geo-blocking technology and avoid any international agreements that would prevent or
    ban consumers from circumventing geo-blocking technology.
  • Repeal parallel import restrictions for books to take effect no later than the end of 2017.

Fair use or fair dealing

  • Implement a fair use exception in Australia.
  • Limit liability for the use of orphan works, where a user has undertaken a diligent search to locate the relevant rights holder.

What next?

The Government will now consider the Commission’s final report and any further public submissions they receive over the next few months. We will report the Government’s response to the final report when it issues.


1 Spark, K. (2016, June). ‘The Australian Productivity Commission releases draft report on intellectual property arrangements’, Inspire!, 32, pp. 6–7.
2 Chambers, G. (2016, September). ‘Productivity Commission draft report: ‘In this country, it’s too easy to get a patent.’, Inspire!, 33, p. 4.
3 Productivity Commission. (2016, September). Intellectual Property Arrangements: Productivity Commission Inquiry Report, No. 78, p. 263.
4 Ibid.