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Australia's inquiry into IP system reflects TPP concerns

The government's Productivity Commission announced today that it is opening a public inquiry about the IP laws, including how these laws interact with the country's trade obligations

The Commission, an advisory body within the Treasury, will conduct the 12-month long inquiry into whether current IP laws "provide an appropriate balance between access to ideas and products, and encouraging innovation, investment and the production of creative works".

According to the announcement, the Commission will look into the following issues:

· Incentives for innovation and investment, including freedom to build on existing innovation· Australia's international trade obligations· The relative contribution of intellectual property to the Australian economy· The economy-wide and distributional consequences of recommendations, including their impacts on trade and competition· Ensuring the intellectual property system will be efficient and robust through time, in light of economic changes· How proposed changes fit with, or may require changes to, other existing regulation or forms of assistance· The relevant findings and recommendations of recently completed reviews.

Some of these issues are particularly timely given the controversy surrounding the Transpacific Partnership (TPP). The call for an assessment of the country's international trade obligations and the IP laws of trade partners makes sense in light of reports that the US and Australia are in disagreement over the length of data exclusivity periods for biologics. US law provides 12 years of exclusivity and is seeking the same, but Australia has said it would only go for five per its current law, given concerns about increased drug costs for its national healthcare system.

This inquiry on the IP system is one of several coming from the Australian government in the last year. In June, IP Australia (the patent office) published a report finding that there was little proof that the country's innovation patents, similar to utility model patents elsewhere, encouraged research and development or increased use of the IP system. And in March, the Competition Policy Review finalised its report on the country's competition laws, which included an analysis of the interplay between competition law and intellectual property. It recommended several things, including the repeal of Section 51(3) of the Competition and Consumer Act 2010, which provides limited exemptions for the exercise of IP rights and is sometimes targeted as an unnecessary hindrance to licensing. The review also recommended relaxing many of the restrictions to parallel importation, citing the high prices Australians pay for largely identical goods in comparison to consumers elsewhere, even when the goods are digital.

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