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Intellectual Property Issues Raised in Competition Policy Review

In 2013, the Australian Government commissioned an expert panel review of competition policy in Australia. The final report of the panel (known as the Harper Review) was issued in March 2015. The report makes 56 recommendations for reforms across a wide spectrum of policy, laws and institutions. Three of the recommendations relate to intellectual property issues.

Striking the balance

In many ways, intellectual property rights and competition policy can be viewed as conflicting issues. Nevertheless, the review panel recognised that intellectual property rights have an important role in fostering and encouraging innovation, which ultimately benefits Australian consumers and promotes competition and trade.

However, within this context, Australia is a net importer of intellectual property. And the fact remains that intellectual property rights, when applied inappropriately, can stifle competition and undermine Australian competition policy over the long term.

Consequently, the intellectual property-related recommendations of the report have been made with the intention establishing an appropriate balance between IP rights and competition policy.

Recommendations

An overarching review of IP policy

The report recommends a thorough review of Australia’s intellectual property regimes within the context of a firm competition policy. The purpose of the review will be to identify any need for reform within intellectual property laws and policy, to ensure that the positive public policy aspects of intellectual property are being met.

The report also recommends that firm intellectual property policy issues be established when Australia enters into trade negotiations with other countries.

Repeal current IP licence/assignment exemptions from Competition and Consumer Act 2010

The Competition and Consumer Act 2010 currently gives IP-related transactions limited exemption from various competition law prohibitions . The exemptions cover conditions employed in licences or assignments across the various IP regimes, and do not extend to issues of misuse of market power and resale price maintenance.

The review noted that this sort of exemptions do not exist in other significant countries, and that they are open to abuse for anti-competitive practices.

Consequently, the review recommends that these exemptions be abolished.

A relaxation of laws and policy relating to parallel imports

Parallel importing is the practice of importing authentic goods from overseas, rather than sourcing the goods from an authorised Australian distributor – often with significant cost benefits to the buyer. However, holders of copyright and trade mark rights can take legal action to restrict and prevent parallel importation.

The review recommended a review of the parallel importation issue, and the potential relaxing of restrictions on the practice, as this may benefit Australian competition and reduce costs for Australian consumers.

The review suggested that any concerns about imported goods meeting safety standards could be addressed through other regulatory means.

Summary

Whether or not these recommendations go any further is a matter for the Australian government to decide. It will be a matter of politics as to if, and how far, these recommendations are implemented.