Intellectual Property and Antitrust 2015 – Q&A on Australian IP Law

1 Intellectual property law

Under what statutes, regulations or case law are intellectual property rights granted? Are there restrictions on how IP rights may be enforced, licensed, or otherwise transferred? Do the rights exceed the minimum required by the WTO Agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPs)?

Intellectual Property Rights (IPRs) are granted pursuant to the Trade Marks Act 1995 (Cth), the Patents Act 1990 (Cth), the Copyright Act 1968 (Cth), the Designs Act 2003 (Cth), the Plant Breeders Rights Act 1994 (Cth) and the Circuit Layouts Act 1989 (Cth), which are all federal statutes.

The Trade Marks Act 1995 (Cth) entitles the owner of a registered trademark to exclude others from using a substantially identical or deceptively similar mark in relation to goods and services that are the same as or similar to the goods and services in relation to which the mark is registered. Registration may be renewed indefinitely by paying a fee every 10 years.

The Patents Act 1990 (Cth) grants the owner of a standard patent the right to prevent others from exploiting (including by manufacturing, using or selling) a patented invention, for a period of 20 years from the filing or other priority date. Patents for pharmaceutical substances may be eligible for an extension of term of no more than five years. The monopoly in an innovation patent (which has a lower standard of inventiveness than a standard patent, and no more than five claims) is for a period of 10 years.

The Designs Act 2003 (Cth) gives the owner of a registered design of a product a monopoly over manufacturing or selling products of that kind embodying the design, for a period of 10 years.

The Plant Breeders Rights Act 1994 (Cth) grants the owner of a registered plant variety a monopoly in respect of the registered variety and dependent varieties, for a period of 20 years (25 years in the case of trees and vines).

The nature of the rights granted under the Copyright Act 1968 (Cth) and their duration vary according to the work or other subject matter in which copyright subsists. In general, owners of copyright in literary, artistic, musical and dramatic works have the exclusive right to reproduce, publish and communicate to the public the work, or a substantial part of it, for a period of 70 years from the end of the year in which the author of the work died. Copyright in sound recordings and films lasts 70 years from the date of first publication.

The Circuit Layouts Act 1989 (Cth) grants a monopoly in circuit layouts and integrated circuits made in accordance with them for a period of 10 years from the date of first commercial exploitation of the layout.

There is no Australian legislation protecting unregistered designs or databases, but both, in some circumstances, may be the subject of copyright protection. Unregistered trademarks and rights in relation to trade secrets and confidential information can be protected by the courts on non-statutory legal principles.

There are no general restrictions on how IPRs may be exercised, but there are many specific reasons why the exercise of an IPR may be unlawful, including that it infringes another IPR or contravenes competition or consumer laws. There are specific restrictions concerning the patenting of inventions with military applications.

IPRs can be assigned by writing signed by the assignor. In the case of patents, the assignee must also sign. There are some restrictions on the assignment or licensing of jointly owned IPRs without the consent of the other joint owner.

Australian IPRs are generally in line with the TRIPS Agreement, but exceed its minimum requirements in some respects, including:

  • copyright protection is, in general, 20 years longer than required by TRIPS;
  • copyright infringement may result in civil and criminal liability;
  • the availability of patent term extensions for pharmaceuticals; and
  • protection for sound and scent trademarks, as well as marks that are visually perceptible.

2 Responsible authorities

Which authorities are responsible for granting, administering or enforcing IP rights?

The Commissioner of Patents and the Registrars of Trade Marks, Designs and Plant Breeders Rights have formal responsibility for examination and registration of IPRs, including the conduct of opposition proceedings. IP Australia is the government body that administers intellectual property legislation. Enforcement and revocation of IPRs is largely the responsibility of courts. As explained in question 4, the Australian Customs Authority can, in certain circumstances, seize goods that are suspected of infringing copyright or a registered trademark.

3 Proceedings to enforce IP rights

What types of legal or administrative proceedings are available for enforcing IP rights? To the extent your jurisdiction has both legal and administrative enforcement options for IP rights, briefly describe their interrelationship, if any.

IPRs are enforced through federal and state courts, usually the Federal Court of Australia and State or Territory Supreme Courts. Lower value disputes in relation to copyright, designs and trademarks may be heard in the lower-cost Federal Circuit Court which can provide injunctive relief and award damages up to $750,000. There are no specialised IP courts.

Owners of registered trademarks and copyright can file a notice with the Australian Customs Authority authorising the seizure of goods that are suspected of infringing. Unless the owner of the goods disputes the seizure, the goods are forfeited. If the seizure is disputed, unless the IPR owner brings legal action through the courts against the importer to determine if the goods infringe within 10 business days of receiving notice of the dispute, the goods will be released to the importer. There are no other administrative means of enforcing IPR.

4 Remedies

What remedies are available to a party whose IP rights have been infringed? Do these remedies vary depending on whether one utilises judicial or administrative review or enforcement?

Civil remedies include injunctions, damages (compensatory and additional), account of profits (in full or part) and delivery of infringing goods. These remedies are only granted by courts. Some activities in relation to trademarks and copyright can result in criminal prosecution.

5 Nexus between competition and IP rights

Do any statutes, regulations or case law in your jurisdiction address the interplay between competition law and IP law?

Section 144 of the Patents Act 1990 (Cth) renders void terms of patent assignments or licences, which prohibit the assignee or licensee from using products or processes supplied or owned by third parties, or which require the assignee or licensee to buy products not protected by the patent from the assignor or licensor. Section 145 of the Patents Act 1990 (Cth) provides that patent licences may be terminated by either party on giving three months’ notice in writing once the patents which are the subject of the licence are no longer in force. These provisions are intended to prevent patent rights being used to obtain an unfair collateral advantage with section 145 concerned to prevent the holder of a patent from taking potentially unfair advantage of the statutory monopoly conferred by a patent after it has expired.

These provisions have been the subject of limited judicial consideration. However, in MPEG LA, LLC v Regency Media Pty Ltd [2014] FCA 180, the Federal Court considered whether Regency Media had lawfully invoked section 145 of the Patents Act 1990 (Cth) to terminate a patent pool licence with MPEG LA, LLC when many but not all of the licences in the pool had expired. Based on the construction of the section, the Court found that the expiry of some of the patents in the pool did not give rise to the right to terminate under section 145 and that no notice of termination could be given until all patented inventions identified in the licence had expired. This decision has been appealed.

The Competition and Consumer Act 2010 (Cth) (CCA) does not deal specifically with abuse of IPRs, but its general provisions could in principle be contravened by abuse of IPRs.

6 Patent cooperation treaties and other agreements

Does your jurisdiction participate in any patent cooperation
treaties or other similar agreements?

Australia is a party to a number of multilateral treaties that WIPO administers including the WIPO Patent Cooperation Treaty, the TRIPs Agreement, the Paris Convention, the Patent Law Treaty, the Madrid Protocol for International Trade Marks, the Trade Mark Law Treaty, the Nice Agreement and the Berne Convention.

Australia is also a party to a number of bilateral trade agreements such as the Singapore-Australia Free Trade Agreement, Thailand-Australia Free Trade Agreement, Australia-United States Free Trade Agreement, Australia-Chile Free Trade Agreement and the Australian-New Zealand-ASEAN Free Trade Agreement.

7 Remedies for deceptive practices

With respect to trademarks, do competition or consumer protection laws provide remedies for deceptive practices?

Section 18 of the Australian Consumer Law (ACL) (which is Schedule 2 to the CCA) prohibits a person engaging, in trade or commerce, in misleading or deceptive conduct, or conduct that is likely to mislead or deceive. Contravention of section 18 is frequently added as a claim to legal actions for trademark infringement and passing off. Making false or misleading representations in relation to the source, sponsorship or affiliation of goods or services is prohibited by section 29 of the ACL, and can result in the imposition of pecuniary penalties payable to the Commonwealth government, as well as civil liability to anyone who has suffered loss.

8 Technological protection measures and digital rights management

With respect to copyright protection, is WIPO protection of technological protection measures and digital rights management enforced in your jurisdiction? Do statutes, regulation or case law limit the ability of manufacturers to incorporate TPM or DRM protection limiting the platforms on which content can be played? Has TPM or DRM protection been challenged under the competition laws?

The Copyright Act 1968 (Cth) contains provisions prohibiting the circumvention of TPMs and the removal of electronic rights management information (ERMI), subject to some very significant exceptions.

Since 2006, TPMs have been defined by section 10 of the Act as devices or technology that:

  • are used in connection with copyright in a work or other subject matter, and control access to the work or other subject matter (Access TPM); or
  • prevent, inhibit or restrict the doing of an act comprised in a copyright of the work or subject matter.

The requirement that an Access TPM must be used in connection with the exercise of copyright means that the use must be in relation to an act comprised in the copyright, such as reproducing or communicating the work to the public and not merely in relation to the article embodying the copyright work.

The definition expressly excludes devices and technologies that control geographic market segmentation of films and computer programs by preventing playback in Australia of non-infringing copies acquired outside Australia or which restrict the supply or use of third party spare parts and maintenance or repair services in relation to a machine or device that embodies a computer program.

Exemptions from copyright infringement found elsewhere in the Copyright Act 1968 (Cth) also apply to DRMs and ERMI. These include exceptions for interoperability of computer programs, use in educational institutions, and law enforcement and national security.

DRMs that limit the number of times a copyright work can be downloaded or which prevent copying of the work would fall within the definition of TPMs in the Copyright Act 1968 (Cth).

Removal or alteration of ERMI is not unlawful if the defendant can establish that it did not know, and should not reasonably have known, that the removal or alteration would induce, enable, facilitate or conceal an infringement of copyright. Manufacture of and dealing in circumvention devices is also unlawful in some circumstances, as is dealing in material where ERMI has been removed or altered.

It is possible that agreements, understandings or arrangements to impose or enforce TPMs and DRMs that do not fall within the definition of TPMs in the Copyright Act 1968 (Cth) could contravene the CCA, but there are no reported cases concerning this or the anti-circumvention provisions of the Copyright Act 1968 (Cth) since it was amended in 2006.

9 Industry standards

What consideration has been given in statutes, regulation or case law to the impact of the adoption of proprietary technologies in industry standards?

The issue of patent pools and Standard Essential Patents (SEPS) have received little scrutiny in Australia. The issue of SEPs did arise in Federal Court litigation between Apple and Samsung where Samsung has asserted its 3G SEPs against Apple, but the case was dropped.

There is no legislation or case law expressly dealing with the inclusion of proprietary technologies in industry standards, although agreements, arrangements or understandings to include such technologies in order to restrict competition in a market might contravene the CCA.

Section 133 of the Patents Act 1990 (Cth) allows a person to apply to the Federal Court for an order requiring the patentee to grant the applicant a licence to work the patented invention. The court may grant the licence if:

  • the patentee has refused to license the applicant to work the invention on reasonable terms, without giving a good reason; and
  • the reasonable requirements of the public in respect of the patented invention have not been satisfied.

A compulsory licence may also be granted if the patentee has contravened Part IV of the CCA (the restrictive trade practices provisions of the CCA, see question 10) in connection with the patent. A compulsory licence must not be exclusive, and the applicant must pay a fee determined by the court to be just and reasonable. There are no reports of court decisions concerning this provision, in relation to industry standards or otherwise.

10 Competition legislation

What statutes set out competition law?

Australia’s competition legislation is set out in the CCA. Part IV of the CCA covers restrictive trade practices as follows:

  • Division 1 prohibits cartel conduct. It prohibits the making of a contract, arrangement or understanding that contains a cartel provision, being a provision relating to price fixing, restricting outputs in the production and supply chain, allocating customers, suppliers or territories or bid rigging. Cartel conduct can give rise to criminal prosecution as well as civil remedies;
  • Division 1A prohibits price signalling between competitors; and
  • Division 2 prohibits contracts, arrangements or understandings that restrict dealings or affect competition (exclusionary provisions), price fixing, secondary boycotts, misuse of market power, exclusive dealing, resale price maintenance and acquisitions that would result in a substantial lessening of competition.

Contravention of Divisions 1A or 2 can give rise to both a civil liability to compensate anyone who has incurred losses as a result of the conduct, and pecuniary penalties payable to the Australian Competition and Consumer Commission (ACCC).

11 IP rights in competition legislation

Does the competition legislation make specific mention of IP

The only express reference to IPRs in the CCA is section 51(3), which provides an exemption from Part IV (with the exceptions of sections 46 and 46A (misuse of market power) and section 48 (resale price maintenance)) for certain conditions in IPR contracts. The exemption covers the imposing, or giving effect to, a condition of:

  • a licence granted by the owner or licensee of a patent, registered design, copyright, or circuit layout right or by an applicant for registration of a patent or design; or
  • an assignment of any of the above rights.

The exemption only applies to the extent that the condition relates to the invention, product, work or other subject matter, or eligible layout that is the subject of the right being licensed or assigned.

The section 51(3) exception also applies to the inclusion of or giving effect to a provision:

  • authorising the use of a certification trademark in accordance with the rules that apply to use of the certification trademark; or
  • an agreement between the owner of a registered trademark and an authorised user of the mark, to the extent that it relates to the kinds, qualities or standards of goods bearing the mark that may be produced or supplied by the authorised user.

Section 51(4) preserves the validity of contract terms protected by section 51(3), which otherwise would be rendered unenforceable or void under Part IV.

12 Review and investigation of competitive effects from exercise of IP rights

Which authorities may review or investigate the competitive effect of conduct related to exercise of IP rights?

The ACCC is the statutory body that has authority to investigate and review conduct that may breach the CCA, including conduct relating to IP rights. The ACCC has power to authorise conduct or agreements that would otherwise contravene the CCA, if the public benefits of the agreement or conduct outweigh its anti-competitive effects.
The ACCC may apply to the Federal Court of Australia for remedies such as injunctions and publication of corrective advertising and for pecuniary penalties resulting from contraventions of the CCA.

13 Competition-related remedies for private parties

Can a private party recover for competition-related damages caused by the exercise, licensing or transfer of IP rights?

If the harm is caused by conduct in relation to IPRs that contravene the CCA, private parties may obtain remedies including damages, injunctions, a declaration that contracts or parts of them are void or unenforceable, variation of contracts and orders for corrective advertising.

14 Competition guidelines

Have the competition authorities or any other authority, issued guidelines or other statements regarding the overlap of competition law and IP?

The ACCC has not issued guidelines or other statements concerning the overlap of competition law and IP, and neither has any other authority.

15 Exemptions from competition law

Are there aspects or uses of IP rights that are specifically exempt from the application of competition law?

The exemptions from the CCA relating to IPRs are described in question 11. However, there are significant limitations to these exemptions.

They do not cover unregistered trademarks protected by the law of passing off or the use of trade secrets or confidential information. The trademarks exemption applies to contractual restrictions only to the extent that they relate to the kinds, qualities or standards of goods bearing the mark that may be produced or supplied by the licensee or assignee. Consequently, restrictions on the source of supply of the goods, or territorial restrictions, or customer or price restrictions, would not be exempt from Part IV.

While the exemptions for other forms of IPRs are wider in that the condition need only relate to the subject matter of the IPR, it is not clear how this would be interpreted by the ACCC or the courts. There is only one court decision considering section 51(3), Transfield Pty Ltd v Arlo International Ltd (1980) 144 CLR 83, a decision of the High Court of Australia. Three members of the court considered that if a contract clause requiring a licensee to use its best endeavours to sell a patented product meant that the licensee could not sell competing products (an interpretation rejected by the court), it would have been protected by section 51(3). Some commentators consider that 51(3)(a) would protect conditions relating to the suppliers, quality and quantity of goods sold, customers and territory of the licensee or assignee or even provisions setting prices for licensed goods, provided they did not constitute resale price maintenance or a misuse of market power.

16 Copyright exhaustion

Does your jurisdiction have a doctrine of, or akin to, ‘copyright exhaustion’ (EU) or ‘first sale’ (US)? If so, how does that doctrine interact with competition laws?

Australia does not have a general doctrine of exhaustion of IPRs. However, if a product is placed on the Australian market without express restriction on resale, the contract of sale will be deemed to include an implied right to resell the product without restriction.

If the contract does contain a prohibition on resale, resale will constitute an infringement of patent or design rights, as well as breach of contract. It is therefore possible to prevent grey marketing of patented or design protected products. However prohibitions or restrictions on resale may constitute exclusive dealing, and contravene section 47 of the CCA, unless protected by section 51(3).

Copyright is different in that the sale of products is not one of the exclusive rights of the copyright holder and, as a result, resale in Australia of legitimate products made in Australia is not an infringement of copyright. However, the importation of legitimate products without the permission of the copyright holder, and their resale, is defined as a specific form of infringement by sections 37 and 38 of the Copyright Act 1968 (Cth). This is subject to a narrow exclusion where the seller of parallel imported goods does not know or have reason to know that the importer is not the owner of the Australian copyright.

The Copyright Act 1968 (Cth) also contains provisions allowing parallel importation of specific goods such as sound recordings, software and books. Trademarks cannot be used to prevent parallel importation if the registered trademark has been applied to the goods with the consent of the owner of the trademark or in some circumstances by its predecessor in title. It is also not possible to rely on copyright in labels, instruction booklets and so on, to prevent parallel importation.

17 Import control

To what extent can an IP rights holder prevent ‘grey-market’ or unauthorised importation or distribution of its products?

See question 16.

18 Jurisdictional interaction between competition laws and IP rights

Are there authorities with exclusive jurisdiction over IP related or competition-related matters? For example, are there circumstances in which a competition claim might be transferred to an IP court to satisfy subject matter jurisdiction? Are there circumstances where the resolution of an IP dispute will be handled by a court of general jurisdiction?

IPRs are enforced through federal and state courts, usually the Federal Court of Australia and state or territory Supreme Courts. Lower value disputes in relation to copyright, designs and trademarks may be heard in the lower-cost Federal Circuit Court. The Federal Court has general jurisdiction in relation to Federal laws including all IP legislation and the CCA, and associated matters. State and Territory Supreme Courts have general jurisdiction in relation to matters connected with the relevant state or territory, including IP enforcement. The Federal Court of Australia has exclusive jurisdiction in relation to Part IV of the CCA (competition law matters).

Merger review

19 Powers of competition authority

Does the competition authority have the same powers with respect to reviewing mergers involving IP rights as it does with respect to any other merger?

The CCA does not distinguish between mergers involving IPRs and mergers that do not involve IPRs.

20 Analysis of the competitive impact of a merger involving IP rights

Does the competition authority’s analysis of the competitive impact of a merger involving IP rights differ from a traditional analysis in which IP rights are not involved? If so, how?

The ACCC’s analysis of the competitive effect of a merger would not vary in principle because IP rights were involved. Section 50 of the CCA prohibits acquisitions of shares or assets (which could include IPRs) if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in any (Australian) market. Ownership of IPRs by either the acquirer or the target is just one factor among others that can be taken into account in determining whether the acquisition is, or is likely to have, the effect of substantially lessening competition. Section 50(3) includes a non-exhaustive list of factors the ACCC must take into account.

There is no express reference to IPRs, but control of IPRs would be relevant to some of these factors, such as the availability of substitute products or services in the market and the likelihood that the acquisition would result in the acquirer being able to significantly and sustainably increase prices or profit margins.

21 Challenge of a merger

In what circumstances might the competition authority challenge a merger involving the transfer or concentration of IP rights? Does this differ from the circumstances in which the competition authority might challenge a merger in which IP rights were not a focus?

See question 20. It is not a legal requirement to obtain the consent of the ACCC before an acquisition, but to avoid the risk following the acquisition, the ACCC will bring a court action for contravention of section 50 and a company may seek formal (public and binding) clearance of the acquisition from the ACCC under sections 95AC to 95AS of the CCA, or informal (private and non-binding) clearance. The only basis for either clearance is that the acquisition does not contravene section 50. A merger involving the transfer or concentration of IP rights is not treated any differently to a merger where IP rights are not a focus.

22 Remedies to address the competitive effects of mergers involving IP

What remedies are available to address competitive effects generated by a merger when those effects revolve around the transfer of IP rights?

The remedies available to the ACCC if an acquisition contravenes section 50 are a court order that the corporation and its officers pay a pecuniary penalty (section 76) and an injunction to restrain completion of the acquisition (section 80).

Any person (including the ACCC) can apply to a court for a divestiture order in relation to the unlawfully acquired asset (section 81) and any person who has suffered loss or damage by reason of the unlawful acquisition can seek an order for damages. Where the unlawful acquisition is of IP rights, a divestiture order could be made in relation to the IPRs. A court can also grant a declaration that the acquisition is void.

See question 9 in relation to compulsory licences under the Patents Act 1990 (Cth).

Specific competition law violations

23 Conspiracy

Can the exercise, licensing or transfer of IP rights create pricefixing or conspiracy liability?

An agreement for the licensing or assignment of intellectual property between competitors may contravene the cartel provisions of the CCA if the agreement contains provisions that result in price fixing, the restriction of outputs in the production and supply chain or the allocation of customers, suppliers or territory. However, section 51(3) of the CCA excepts certain provisions in licences and assignments of IPRs (see question 11) from the cartel provisions.

A patent pool may be anti-competitive if it facilitates price fixing or market sharing, includes output restraints or deters competitive conduct. Even if a cross-licensing arrangement or a patent pool is anti-competitive, if the public benefits of the agreement outweigh its anti-competitive effects, the agreement may be authorised by the ACCC under Part VII of the CCA.

24 Reverse payment patent settlements

How have the competition laws been applied to reverse payment patent settlements in your jurisdiction?

There is no Australian case law which has applied competition law to reverse patent settlement payments, patent pools, copyright collectives or standard setting bodies. Competition laws do not treat these forms of conduct differently from similar non-IP related conduct.

25 (Resale) price maintenance

Describe how the exercise, licensing, or transfer of IP rights can relate to (resale) price maintenance.

Resale price maintenance is prohibited by section 48 of the CCA in all circumstances, including in licences or assignments of IPRs.

26 Exclusive dealing, tying and leveraging

Can the exercise, licensing, or transfer of IP rights create liability under statutes or case law relating to exclusive dealing, tying and leveraging?

The use of licences and assignments of granted patents to compel the use of other products is unenforceable under section 144 of the Patents Act 1990 (Cth) (see question 5). This does not apply to patent applications, or to other forms of intellectual property.

Section 47 of the CCA prohibits contracts for the supply of goods or services including restraints on from whom the parties can acquire other goods or to whom they can supply goods if the conduct is for the purpose or has or is likely to have the effect of substantially lessening competition.

Section 47(7) prohibits third-line forcing and is not subject to the substantially lessening competition test. Section 47 does not apply to dealings between related bodies corporate.

Certain conditions of IP licences and assignments that would otherwise constitute exclusive dealing are exempted from the operation of section 47 (see question 15).

27 Abuse of dominance

Can the exercise, licensing, or transfer of IP rights create liability under statutes or case law relating to monopolisation or abuse of dominance?

Section 46 of the CCA prohibits a corporation that has a substantial degree of power in a market from taking advantage of that power for the purpose of eliminating or substantially damaging a competitor, preventing the entry of a person into a market or deterring or preventing a person from engaging in competitive conduct in a market. Market power has been defined as the power to behave in a market in a manner not constrained by competitors in that market for a sustained period, often evidenced by the ability to raise prices without losing customers to competitors. Market power may arise from many factors, including ownership of IPRs. Specific factors to which section 46 directs the attention of the court include the extent to which the conduct of the corporation is constrained by the conduct of competitors, potential competitors, suppliers, or customers and any contracts, arrangements or understandings between the corporation and other persons. However, the High Court has held that the fact that a corporation possesses a substantial degree of market power arising from IPRs and that the enforcement of its IPRs deters others from engaging in competitive conduct, does not of itself mean that the corporation has misused market power, because it could, and probably would, have enforced its IPRs in the same way if it did not have a substantial degree of market power (Melway Publishing Pty Ltd v Robert Hicks Pty Ltd [2001] HCA 13).

In making determinations in relation to section 46, no distinction is drawn between the exercise of IP rights by a dominant firm or a firm with market power and non-IP related conduct.

28 Refusal to deal and essential facilities

Can the exercise, licensing, or transfer of IP rights create liability under statutes or case law relating to refusal to deal and refusal to grant access to essential facilities?

Refusal to license IPRs is not of itself prohibited by the CCA and is unlikely to constitute misuse of market power (see question 27). See question 9 in relation to compulsory licensing under the Patents Act 1990 (Cth).

Agreements between competitors not to license IPRs to third parties could constitute exclusionary provisions, prohibited by section 45 of the CCA and the grant of exclusive licences could constitute exclusive dealing if likely to have a substantial effect on competition, but both in some circumstances would be protected by section 51(3) (see question 11).

Part IIIA of the CCA sets out a procedure by which the Federal Treasurer or a relevant state or territory minister may declare that a physical facility is essential if:

  • it is of national significance;
  • it would be uneconomical for anyone to develop another facility; and
  • increased access to services provided by the facility would promote a material increase in competition in a market (other than a market for the services provided by the facility).

A person who has been refused access to the services provided by the facility may seek arbitration of an access regime by the ACCC, reviewable in the Australian Competition Tribunal. There are separate but similar processes in relation to telecommunication and broadcasting infrastructure. In principle, any of these provisions could apply to services that are the subject of IPRs owned or licensed by the owner of the facility, but there are no decided cases on this point.


29 Remedies for violations of competition law involving IP

What sanctions or remedies can the competition authority or courts impose for violations of competition law involving IP?

See question 9 in relation to compulsory licensing under the Patents Act 1990 (Cth). The courts can impose fines for cartel conduct of up to A$10 million or three times any benefit obtained by commission of the offence, if this is greater. They can also impose pecuniary penalties of the same amounts on the civil standard of proof for contraventions of Part IV. Damages, injunctions, a declaration that contracts or parts of them are void or unenforceable, and variation of contracts and orders for corrective advertising are remedies available to litigants who have suffered loss due to the contravention.

Neither the ACCC nor the courts have the power to order divestiture of IP rights, other than IP rights acquired in contravention of section 50 (see question 22).

30 Competition law remedies specific to IP

Do special remedies exist under your competition laws that are specific to IP matters?

There are no special remedies in the CCA specific to IP matters.

31 Scrutiny of settlement agreements

How would a settlement agreement terminating an IP infringement dispute be scrutinised from a competition perspective? What are the key factors informing such an analysis?

Neither the ACCC nor any other public body has any right under Australian law to scrutinise a settlement agreement unless it has grounds to suspect that the agreement contravenes Australian law. Settlement agreements are usually confidential, subject to disclosure to the market required by corporations law. However, a settlement agreement terminating an IP infringement dispute must comply with the CCA. A settlement agreement in which one party agrees not to compete in respect of the patented product will violate competition law if it can be shown to have the effect or likely effect of substantially lessening competition in the market for the patented product and is not protected by section 51(3) of the CCA (see question 11). Such an agreement may constitute a misuse of market power if the patentee has a substantial degree of market power and has used that, rather than the strength of its patent rights, to obtain the settlement. Section 51(3) does not apply to misuse of market power.

There are no cases on reverse patent settlement payments to date. FTC v Actavis may be referred to if an Australian court is required to consider whether a reverse patent settlement agreement is anti-competitive.

Economics and application of competition law

32 Economics

What role has competition economics played in the application of competition law in cases involving IP rights?

There have been no decided cases involving IP rights.

Recent cases and sanctions

33 Recent cases

Have there been any recent high-profile cases dealing with the intersection of competition law and IP rights?

There have been no cases under the CCA in which sanctions or remedies have been imposed arising from the use of IPRs.

34 Remedies and sanctions

What competition remedies or sanctions have been imposed in the IP context?

There have been no cases under the CCA in which sanctions or remedies have been imposed arising from the use of IPRs.

Update and trends

The Australian government is currently conducting a review of competition policy, with the final report due for release in 2015. Among the issues it will consider are regulatory impediments to competition, including restrictions arising from the granting of IPRs. It will also consider whether current restrictions on parallel importation should be removed or altered to increase competition.

The ACCC has commenced proceedings in the Federal Court against Pfizer Australia Pty Ltd (Pfizer) for alleged misuse of market power and exclusive dealing in relation to its supply of a pharmaceutical to pharmacies in contravention of the CCA. The ACCC is alleging that offers of discounts and rebates first made prior to the loss of patent protection for the product were made for the purpose of deterring or preventing competitors in the market for the product from engaging in competitive conduct and for the purpose of substantially lessening competition. Should a decision issue in this case, it may provide guidance on what steps patent holders can take to compete in the market once a patent expires.

Reproduced with permission from Law Business Research Ltd. This article was first published in Getting the Deal Through: Intellectual Property & Antitrust 2015, (published in November 2014; contributing editor Peter Levitas, Arnold & Porter LLP)  For further information please visit


Annette Rubinstein, Former POF Attorney

BA(Hons) LLB(Hons)

Annette has worked in the Legal Policy and Research Department of the Victorian Attorney General’s Department and has practised as a barrister.