Regulatory use exemption from patent infringement for non-pharmaceutical patents

Overview

  • Raising the Bar is a major reform to Australia's intellectual property legislation.
  • The reforms include a regulatory approval exemption from patent infringement for non-pharmaceuticals.
  • The reforms allow generic manufacturers to conduct the testing necessary for regulatory approval before the patent term ends.
  • The exemption applies to work done solely for the purposes connected with obtaining regulatory approval that is required by law.

What is happening?

The Intellectual Property Laws Amendment (Raising the Bar) Act 2012 amends the Patents Act 1990.  One of the amendments introduces an exemption from patent infringement for the conduct of research and trials necessary for gaining regulatory approval for non-pharmaceutical products.

Why introduce the exemption?

The patent system strikes a balance between rewarding inventions and allowing subsequent competition. Twenty years is currently accepted by most countries as the appropriate maximum duration of patent protection for most technologies. After the expiry of a patent, anyone is able to market the previously patented technology in competition with the former patent holder. These subsequent products are known as 'generic'.  

However, this balance can be upset where a generic manufacturer must seek regulatory approval before marketing their product. The approval process often involves making or using the patented invention, with the result that the generic manufacturer must wait until the term of the patent has ended before seeking regulatory approval in order to avoid infringing the patent.

This has the effect of giving the patent owner a de facto extension of the patent term beyond the 20 years given by the Patents Act 1990.

This issue was addressed in regards to pharmaceutical products by the introduction, in 2006, of section 119A to the Patent Act 1990. It permits generic manufacturers to obtain regulatory approval during the term of the pharmaceutical patent so they can compete with the patentee as soon as the patent term expires.

However, pharmaceutical patents are not the only types of patentable product where pre-market regulatory approval is required. Agricultural chemicals and certain medical devices also require regulatory approval. There is no reason, in principle, why non-pharmaceutical technologies should be afforded a de facto extension of term.

When will the exemption come into effect?

The exemption became law on the Monday 16 April 2012. It exempts regulatory approval activities done, on or after that date.

What activities are intended to be exempted?

The exemption covers activities undertaken solely for obtaining regulatory approval to exploit a product, method or process (other than pharmaceutical goods covered by section 119A of the Patents Act 1990) under Australian law, or under the law of a foreign country or region (such as the European Union), or both.

Does it matter what type of regulatory requirement is imposed?

The exemption is not intended to limit the type of regulatory approval for which the exemption may be used, save for the requirement that it must be imposed by law.
Section 119B of the Patents Act 1990 is intended to account for changes in existing regulatory requirements. It is also intended to cover regulatory requirements that do not exist now, but may be imposed in the future as new regulatory regimes are created.

What activities are not intended to be exempted?

The exemption is intended to apply only for the purposes of seeking regulatory approval.

Can I use the exemption to stockpile the product or manufacture it for export?

The exemption is not intended to permit a person to stockpile the patented product for sale upon expiry of the patent, or to manufacture the product for export to another country, even if this is done in the process of seeking regulatory approval.

What about experiments?

The exemption is distinct from experimental uses of the patented invention. Experimental uses are dealt with under section 119C of the Patents Act 1990.

Please note; IP Australia can only explain the policy intent of the amendments at the time of enactment. If you need advice on your specific situation or subsequent interpretation of the exemption by the courts, you may wish to consult a registered patent attorney or an intellectual property lawyer.

Extract of the Patents Act 1990

119B  Infringement exemptions: acts for obtaining regulatory approval (non pharmaceuticals)

A person may, without infringing a patent, do an act that would infringe the patent apart from this subsection, if the act is done solely for:

  • purposes connected with obtaining an approval required by a law of the Commonwealth or of a State or Territory to exploit a product, method or process; or
  • purposes connected with obtaining a similar approval under a law of another country or region.

This section does not apply in relation to a pharmaceutical patent within the meaning of subsection 119A(3).