Login
IP exemption update needs company action
A repeal to the laws surrounding intellectual property rights means businesses need to act pro-actively in reviewing their licensing and assignment arrangements, according to lawyers at King & Wood Mallesons.
Grace Ormsby
The adoption of recommendations from a Productivity Commission and Competition Policy Review have seen a repeal to the IP exemption found in section 51(3) of the Competition and Consumer Act 2010 (Cth).
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
Taking effect on 13 September 2019, the Treasury Laws Amendment (2018 Measures No. 5) Bill will prevent existing IP exemption arrangements from being grandfathered into the future, a statement from King & Wood Mallesons has explained.
Partner Lisa Huett and solicitor Stephanie Swan have noted, however, that the delayed commencement gives businesses time to review their existing arrangements to ensure their continued compliance with the competition provisions of the Competition and Consumer Act.
As the law currently stands, part IV of the Competition and Consumer Act “sets out a range of prohibited behaviours and practices that are anti-competitive”.
Notably, section 51(3) of the act “currently contains an exemption to some of the key restrictive trade practices, and allows the holders of IP rights to impose conditions on the licensing or assignment of their IP rights (such as patents, registered designs, copyright or eligible circuit layout rights)”, Ms Huett and Ms Swan said.
In theory, they continued, “this means that IP owners can more freely dictate the manner in which their IP is commercialised”, such as through territorial restrictions.
The change and removal of the exemption means commercial arrangements concerning IP rights “will be subject to competition laws in the same way as any other commercial arrangement”.
With the amendment applying to existing and future licences, assignments and arrangements, “this change may therefore have a significant impact on the lawfulness of existing IP licensing and assignment arrangements”, Ms Huett and Ms Swan re-iterated.
According to the lawyers, given the ACCC’s submissions to the Productivity Commission’s Inquiry into Intellectual Property Arrangements, the ACCC is likely to take an interest in the development, with the combating of cartel conduct “also an enduring priority for the ACCC”.
Ms Huett and Ms Swan outlined the consequences for corporations and individuals found guilty of cartel conduct and their severity, with courts able to make a range of orders that included “imposing criminal and civil penalties (including imprisonment for individuals); injunctions; disqualifying a person from managing corporations; and/or community service orders”.
They also considered the lasting impact of “the reputational harm that will likely result” out of such action.
